Thorstarter — Unlocking Deep Liquidity for Long Tail Cryptoassets
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Community Translations — Русский
Sæll og blessaður, friends.
Greetings all ye blessed THORChads and members of the Thorstarter community. Welcome to the first public announcement and overview of the project.
We’ve spent the last few months deep in the caves of Gnipahellir, hard at work building an important and critical product for the RUNE ecosystem. Last week, we revealed our existence to the world. The response so far has been overwhelmingly positive — a testament to the strength and conviction of the THORChain community.
Please note that Thorstarter has not raised any investment nor have we announced any details around a sale of any kind.
We are building an essential product for the RUNE ecosystem and a great community, first and foremost. Not only because it’s in the ethos of THORChain, but also because the scope of the project stretches far beyond the standard “launchpad” model.
But then, if we’re not just a launchpad, What is Thorstarter?
Well, glad you asked.
Take a seat friend, grab your drinking horn, and strap in.
What is seen can never be unseen. The journey ahead will reveal ancient truths, and is not for the faint of heart. There is no turning back from this point.
Now, let us tell a tale…
Backstory
Launching a new crypto project is hard.
It requires a mix of strong work ethic, dedicated community, technical know-how, acute marketing awareness coupled with a deep understanding of the crypto investing psychology, and a fair bit of luck.
When these elements and others align, projects take off. But for newer projects, there are usually one or several missing pieces. During this bull run, a new model has emerged that effectively addresses some of these challenges and de-risks the process of bringing a new protocol or dapp to market: the IDO “Launchpad.”
While the idea of incubating a tech startup is nothing new, the current iteration and market dominance by different “pads” in the crypto space is a more recent phenomenon.
The launchpad model as it stands today addresses many fundraising shortcomings with early stage crypto projects.
For example, pads allow nearly anyone to participate in a public sale with a small amount of capital. This is good for users, many of whom do not have a lot of capital, and good for the protocol as it gets tokens in the hands of many different users — ie, helps with decentralization.
As many of you are no doubt aware, the launchpad model quickly ran into several problems. The first and most notable of which was a dramatic increase in gas fees.
Popular AMMs like Uniswap enabled projects to quickly bootstrap liquidity from a large number of retail investors, rather than strictly raise capital and sell pre-mined tokens. As the AMM-led “fair launch” model gained traction, Ethereum gas fees rose along with it.
Ever the innovative space, crypto launchpads started popping up on other, non-Eth chains. Polkastarter, DAO Maker, and BSCPAD, among countless others. With each new chain seems to emerge several new launchpads, all ostensibly addressing the same problem: gas fees.
Recent stepwise iterations on the pad model have promised to make allocations fairer, and they should. But looking to the future, ensuring fairer launches is essentially putting a bandaid on a much deeper problem: how launchpads actually source liquidity for new projects.
The issue is not simply a more-democratized model for launching. Rather, it’s that the pads all follow the same business model: giving seed and private sale allocations to influencers (commonly referred to as KOLs) in return for promoting the project on social media.
The model is effective at producing ROI for contributors, but is starting to see rapidly diminishing returns. The number of pads is increasing every day, and they all rely on the same influencers to promote their projects.
More popular pads are launching as many as 10 projects per month. With 50 or so pads and new ones launching every day, it doesn’t take a math wizard to see where things are headed…
Audiences on Crypto Twitter and Youtube are reaching some level of burnout. Pads have responded by pivoting to non-crypto influencers as a means to promote the pad projects, essentially tapping into gaming niches, sports, fitness, music and many others as a means to onboard retail money and keep the party going.
But there are only so many audiences to buy and hold bags, and an ever-increasing number of pads and projects to launch. This model is not sustainable in the long term.
“That which has a bad beginning is likely to have a bad ending.”
- Hen-Thorir’s Saga, c.4
Coupled with the fact that pads have no loyalty to their own chain — many Polkadot-centric pads, for example, are now launching BSC projects — the launchpad model is quickly turning into an undifferentiated mixture of chains and projects, all competing for the same retail capital as a means of bootstrapping liquidity and generating returns for seed investors and KOLs.
It’s fair to say that Launchpads, as a model, are quickly descending into chaos…
Enter Thorstarter ⚡
Amidst this chaos, a semblance of order has emerged.
$RUNE
RUNE is the answer.
The number of blockchains will continue to grow as well the number of blockchain-native crypto assets. For the average user, keeping track of all these chains, different assets, swapping between them — is cumbersome and tiring.
Importantly, RUNE brings order to the chaos. It reduces the entropy in the system. Rather than swapping chains managing different chain-specific cryptoassets, RUNE allows users to hold and swap native tokens with ease.
⚡ Thorstarter allows users to participate in IDOs using native assets on any major blockchain. ⚡
Praise Odin. Thorstarter is a solution to a problem that’s been long-unanswered.
As we started to tackle this problem ourselves in recent months, we often were asked: how does one even build on THORChain?
The protocol is itself a launchpad, in a sense. Projects wishing to “list” on THORChain can do so as they please, committing capital to the protocol as a means to signal a desire to be listed. Priority is given to projects with the most liquidity depth, i.e. those which commit the most RUNE to the protocol.
Coupled with Liquidity Mining incentives, this is an elegant design that drives demand for the RUNE token both by LPs seeking to gain yield on their native assets (eg, APY earned on native BTC), as well as projects seeking to gain access to liquidity from other blockchains. The effect has been aptly called a “Liquidity Black Hole,” sucking in assets and liquidity from all directions.
Once the concept of a liquidity black hole is seen and understood, it cannot be unseen or unknown.
Once grasped, it’s clear how THORChain as an ecosystem will slowly aggregate all the liquidity of the entire 2 trillion+ crypto market. Soon, a supermassive black hole sucking in entire galaxies of liquidity in a mere blink of the eye.
But there’s one problem with THORChain (and other black holes of liquidity like Bancor): despite their best intentions, they primarily serve the short tail of crypto assets, ie crypto “majors” like native BTC, native LTC, ERC20, BEP2, and BEP20 tokens, among others.
Trying to compete with these projects for listing and approval on Thorswap would be cost prohibitive for new projects, many of which have small capital raises when launching on pads.
Further, THORChain only permits a new pool every three days, and there is already a long and impressive queue of pending projects.
Suffice to say that there is not much hope for new projects launching on THORChain unless they are able to source a lot of liquidity with their fundraise. And given the aforementioned problem with the Launchpad model — that is, they are competing for the same KOLs/audiences using a limited capital raise — expecting them to win a red queen race for approval-by-liquidity depth is unrealistic.
But then, what good is a liquidity black hole if it only sucks in a small fraction of the celestial bodies around it? Sure, ETH, BTC and other chains are the “holy grail” of crypto liquidity, but long tail crypto assets make up a significant portion of liquidity in aggregate.
Any new protocol which is able to access cross-chain liquidity via THORChain will have a serious competitive advantage. Particularly as the model of KOL-led liquidity bootstrapping becomes less effective in the middle to late stages of this bull run.
Let’s look at how Thorstarter accomplishes this.
Thorstarter Overview and Key Design Considerations
“If I have seen further it is by standing on the shoulders of Giants.”
~ Thor, Son of Odin
In just a few short years, THORChain has built one of the strongest and most enthusiastic communities in crypto. Thorstarter will follow in these footsteps, drawing in capital from longer tail crypto networks along with their communities.
Following in the footsteps of THORChain, Thorstarter will follow a fair launch model for token distribution. Many launch pads have, until recently, favored higher net worth contributors, enriching the pads at the expense of the projects. While there will be incentives for individuals to contribute significant liquidity to the protocol, we will employ a launch model that gives an equal opportunity for anyone to participate in launches (including our own).
As part of our launch, we will be onboarding strategic partners into the ecosystem. Thorstarter partners will share our vision for bringing — and preserving — liquidity to THORChain, and unlocking that liquidity for longtail cryptoassets in particular.
In other words, we are partnering with key infrastructure projects, RUNE holders, developers, and thought leaders — with an emphasis on the quality, not quantity, of their audiences.
The ultimate North Star for our protocol design is simple: bringing as much liquidity as possible to the RUNE ecosystem and accelerating the liquidity black hole effect. To accomplish this, we take two approaches:
First, the initial version of Thorstarter will continue a highly liquid pool of our token — XRUNE — paired with RUNE. This pool will be available on a DEX with swapping functionality similar to Asgardex. The fundamental concept is that users will be able to access Thorstarter IDO launches by buying and staking XRUNE.
Second, Thorstarter will integrate with a MetaMask-like wallet that uses THORChain as the swapping protocol. The wallet has a browser extension that works on Chrome and Brave, similar to MetaMask, making it extremely easy for new users to buy XRUNE right from their browser.
These features are designed to onboard users and liquidity to RUNE.
Now, let’s take a look at each of the above concepts in more detail.
The xDefi Bridge — Bifröst and Beyond
You cannot become the gateway to the decentralised web without opening all of the doors available to entrants.
- Odin (All Father)
The road to ultimate Valhalla level Thor liquidity requires a frictionless onramp to the Thor ecosystem. Thorstarter accomplishes this using the easiest application possible — the common web browser.
By integrating with xDefi’s upcoming SDK as part of our launch, users will be able to swap THORChain-approved assets directly from their browser.
Users will be able to swap cheaper and easier, bringing more users to THORChain and rewarding XRUNE LPs (and RUNE LPs, too).
With a simple browser extension, users can:
- Receive, quickly send and store digital assets regardless of the chain
- Connect to their favorite dApps
- Swap easily between protocols
- Integrate other native DeFi features
Thorstarter will make it as easy as using your browser extension to buy XRUNE, join in IDOs, and fund new projects instantly and cheaply. Already, users are noticing that fees when swapping native assets on Thorswap are significantly less than swapping ERC20 assets with their wrapped counterparts, even with slightly higher slippage. As Eth fees continue to be a thorn, these low fees will attract users to Thorstarter in droves.
Note that XRUNE is the bridge asset between our launched IDO projects and all native, approved assets on Thorswap.
By creating a deep pool of liquidity with RUNE-XRUNE, the Thorstarter protocol will enable new projects to tap into liquidity from major blockchains with the simplicity of an easy-to-use web extension.
More information about XRUNE, XRUNE pools, our governance council, the XRUNE validator model, and everything else related to the token will be released soon.
Let’s also keep in mind what this means for Thor in general.
Odin would be pleased to know that Thorstarter facilitates the potential for large liquidity inflows into the RUNE ecosystem.
What Thorstarter provides is essentially a shortcut feature to bypass the native pooling system, combined with a better user experience we believe the entire RUNE ecosystem will benefit.
Note that we plan to partner with any wallet which enables users to make cross-chain swaps, such as TrustWallet. xDefi is our main focus for the beta version of the app.
Our Launch Ethos
RUNE is built around a community first principle. Thorstarter plans to pay homage to the original vision of THORChain.
Built by the community, powered by the community and made for the community.
We accomplish this by aligning proper token incentives, distribution and the most equitable allocation structure possible. This process is open to revision and feedback from the community to adapt to a changing market dynamic.
Our goal is to avoid the typical whale’s game of the paid model where smaller investors are priced out of launches.
Oh but ser, when tokens?
The tokenomics of Thorstarter follow the footsteps of the original RUNE launch, placing community participation above all else. That means a larger initial community bootstrapping phase and stronger incentives for validators on the Thorstarter ecosystem, longer lockups for investors and team, and a mechanism for reducing the circulating supply of market XRUNE.
We will be releasing detailed tokenomics in our whitepaper in upcoming posts.
Team Behind Thorstarter
The team behind Thorstarter are a group of community members, long time RUNE investors, and privacy supporters. We are early supports of Monero and Haven, and are excited to see THORChain enabling privacy across chains.
We’ve been working together for a number of years and choose to build on RUNE as we believe it’s one of the few communities that has adhered to the original principles of the crypto movement.
Here is a quick intro to our founding team:
Bjørn Svensson — A lover of code, privacy tech and known to occasionally enjoy a glass or two of strong mead. Bjørn is leading our technical team as a contributor to a number of crypto projects. In a previous life he worked as a security engineer for major CySec firms. Bjørn leads a team of three other developers.
Hafþór Ragnarsson — A crypto enthusiast back from the glory days of bitcoin pizza, Hafþór leaves a long career in enterprise IDaaS to develop Thorstarter’s key integrations and smart contracts.
Tormod Lindström — With a name almost as beautiful as this prose, Tormod is a master of strategy, communication and community. He’s also the one who wrote this primer.
We plan to remain anon and slowly transition Thorstarter to a community run project. We are the original stewards of a project that will one day be completely community run and managed.
Calling Forth the Thorstarter Army
We’re relying on the community to go forth and spread the good word of what we’re building, and will be rewarding active community members for their help and support early on.
Please share this primer with fellow RUNE holders who understand what it is we are building and why it’s important.
Thorstarter will bring massive liquidity to the RUNE ecosystem by unlocking cross-chain liquidity for long tail cryptoassets. We accomplish this using the XRUNE pooled liquidity bridge, enabling new, smaller IDO projects to fundraise in native cryptoassets from other chains.
A supermassive black hole of new project liquidity that slowly annexes all others and retires the existing pad model.
One IDO platform to rule them all, One to bring them all, and in the liquidity bind them.
Welcome to Thorstarter.
