THORChain Analysis

By Tushar Jain

| 20 minute read

Multicoin Capital has accumulated a large position in RUNE, the native token of THORChain, a decentralized cross-chain automated market maker (AMM). RUNE represents one of our largest public positions.

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THORChain Analysis

Multicoin Capital has accumulated a large position in RUNE, the native token of THORChain, a decentralized cross-chain automated market maker (AMM). RUNE represents one of our largest public positions.

The Perpetual Protocol

There’s a long running joke that all financial innovation can be boiled down to two things: figuring out ways to take on more leverage, and (un)bundling risk to more efficiently price assets for investors. The first major financial innovation was the separation of debt and equity back in the 1400s. This innovation unbundled risk, creating two classes of risk holders: debt (lower risk, lower returns), and equity (higher risk, higher returns).

Our Investment in Swivel Finance

Today I’m excited to announce that Multicoin Capital has led a $1.15 million seed round in Swivel Finance, a new decentralized protocol that enables fixed-rate lending and interest-rate derivatives. Electric Capital, CMS Holdings, Divergence Ventures, and DeFiance Capital also participated, as did several angels including Ash Egan, Stani Kulechov of Aave, Alex Pack, Imran Khan, Qiao Wang, and Thomas Klocanas.

The DeFi Stack

Open Finance is one of Multicoin’s three Crypto Mega Theses, wherein Open Finance is a superset of DeFi. Over the past 12 months, there has been an explosion of activity in DeFi on Ethereum: there is $13.6 billion in capital participating in DeFi, up more than 20x over the last year.

Our Investment in OXIO

I’m excited to announce Multicoin Capital’s investment in OXIO. We led OXIO’s $3.5M seed round last year, and now the company is emerging from stealth following a $12M Series A financing led by two of the top VCs in Latin America, monashees and Atlantico Capital.

Trade-offs in the Decentralized BitMEX Space

One of the greatest innovations of modern financial markets is that traders can gain financial exposure to an asset without having to physically settle that asset—aka synthetic exposure. This dramatically expands the universe of traders who can trade in a given market, especially for harder to deliver assets. This is desirable because increasing traders and capital in a given market can help reduce volatility and increase liquidity.

Exploring The Design Space of Liquidity Mining

Decentralized Finance (DeFi) has recently seen an explosion of activity and public interest. The primary driving factor has been the discovery of “liquidity mining” as a mechanism to bootstrap liquidity. Broadly defined, liquidity mining occurs when users of a DeFi protocol are compensated in that protocol’s native token for interacting with the protocol.

Open Audio

The first Internet-enabled application I can remember enjoying was Napster. It was 1999, and I was downloading songs at a blazing fast 2.96 KB / second. On good days, it would tick up to 3.13 KB / second. Music has been—by far—the most censored content on the Western internet over the last 20 years. The waves of censorship have played out time and time again across venues.

Huobi Token ($HT) Analysis and Valuation

Exchange tokens are currently the most interesting sector in crypto because they sit at the intersection of where there is demand today and where there will be opportunities tomorrow. We have previously expressed a [thesis](https://multicoin.capital/2019/10/29/exchanges-are-open-finance/ "Exchanges are Open Finance") that exchange tokens are the best way to get exposure to open finance and that there is tremendous growth potential.

DeFi's Invisible Asymptotes

With the growth of the decentralized finance (DeFi) ecosystem over the last 24 months, I’ve been thinking about protocol-level defensibility and market size. I wrote about the former recently. This essay focuses on the latter. My biggest concern for Ethereum’s current DeFi economy is that it is subject to one or possibly a few invisible asymptotes, as I’ll explain below.