THORChain's Triumph: $10 Billion Trading Volume Amid Bitcoin Safety Concerns – How Did They Do It?

In a significant milestone, THORChain, the decentralized liquidity protocol, has surpassed $10 billion in total monthly trading volume. This marks a historic achievement for the platform. However, amidst this success, there's a growing debate among Bitcoin maximalists regarding the safety of the protocol for potential borrowers.

THORChain Hits $10.2 Billion Volume Milestone, Community Debates Its Security

THORChain announced this milestone through its official social media account on March 27. According to Runscan data, the protocol has recorded a staggering $10.26 billion in trading volume for the current month alone.

Following the announcement, a heated debate erupted among Bitcoin maximalists regarding THORChain's security. Some express reservations about the safety of borrowing on the platform, particularly for Bitcoin holders seeking interest-free loans against their BTC.

Mathematician and Bitcoin investor Fred Krueger voiced confidence in THORChain, declaring it "real" and endorsing BTC-backed loans on the platform as a safe option for Bitcoin holders. However, Bitcoin analyst Dylan Le Clair challenged this view, arguing that such loans pose risks due to their dependence on altcoin exchange rates.

THORChain's Lending Model Debated: Safety, Upgrades, and Concentration Risks

THORChain operates as a decentralized liquidity protocol facilitating asset swaps across blockchains. It provides interest-free loans against major cryptocurrencies like Bitcoin and Ether, with no enforced liquidations or fixed expiry dates.

Recent upgrades to THORChain, including reduced collateral requirements for Bitcoin and Ether, have attracted attention. However, analysts like Chris Blec have raised concerns. They highlight the inherent risks of lending to a protocol that faced security issues in the past and the reliance on centralized providers for loan terms.

THORChain's history includes two mainnet halts in 2023 due to reported security vulnerabilities. These incidents underscore concerns about the protocol's long-term stability and security.