Just recently, Shapeshift founder and CEO Erik Voorhees published a blog post about a new project called Thorchain, a protocol that allows for decentralized exchanges without wrapping or bridging technology commonly used today. Thorchain launched on April 13, 2021, and the Shapeshift founder recently revealed his company is first to leverage the multi-chain protocol in order to provide decentralized swaps in a noncustodial fashion.
Shapeshift Leverages Thorchain for Multi-Chain Unwrapped Swaps
Back in September 2018, the popular trading application Shapeshift changed its business model to a mandatory membership program and users had to submit specific identity criteria in order to swap coins. Then years later in January 2021, Shapeshiftâ€™s CEO Erik Voorhees announced the exchange would be dropping KYC rules. â€œBecause of this fundamental change to our business model, ShapeShiftâ€™s users no longer need to provide personally identifying information to us,â€ Voorhees said at the time.
Now what Shapeshift did was connect to a dozen decentralized exchange (dex) platforms and traders can swap ERC20 tokens and ethereum in a trustless fashion. But four days ago, Voorhees explained the company is â€œenabling decentralized peer-to-pool trading between native bitcoin, litecoin, and ethereumâ€ via Thorchainâ€™s multi-chain protocol. On Twitter, the Shapeshift founder announced the integration and displayed a screenshot of native (unwrapped) ethereum being traded with native (unwrapped) bitcoin.
â€œBeholdâ€¦ this has never been done before,â€ Voorhees said on Twitter. â€œNative (unwrapped) ethereum in native (unwrapped) bitcoin out. [A] $5,000 trade, no intermediary, no custody, [and] no KYC. [Shapeshift] today launched decentralized cross-chain trading, by integrating Thorchain (which also launched today),â€ he added on April 13. Additionally, the Shapeshift founder published a comprehensive blog post about the technology.
Voorhees writes that an â€œoverly simplistic explanationâ€ of Thorchain is that the protocol is â€œlike Uniswap, but multi-chain.â€ The difference is there is no wrapping and users can earn yield in a decentralized trust-minimized fashion. â€œWith Thorchainâ€™s launch, Shapeshift is the first company enabling decentralized peer-to-pool trading between native bitcoin, litecoin, and ethereum. More assets are imminent. We are doing this because free people have the right to financial privacy, open trade, and sound money,â€ Voorhees stressed.
Tendermint, Cosmos, and Chaosnet
The Thorchain protocol leverages the Tendermint consensus protocol and Cosmos SDK. The platform provides an automated market maker (AMM) system and nodes run Thorchain and a supporting node like Bitcoin, Ethereum, and alternative blockchain networks. Thorchainâ€™s â€œChaosnetâ€ provides people with the means to swap without any custodians involved. â€œYou can think of Thorchain Nodes like â€˜fragmentsâ€™ of the wallets of a centralized exchange,â€ the Shapeshift founder details.
During the last year and a half, decentralized exchange (dex) protocols blossomed a great deal. Dex platforms like Uniswap, Sushiswap, Curve, 0x Native, Bancor, Balancer, and more have seen $18 billion in trade volume during the last seven days. Dex volumes have seen $2.85 billion traded during the last 24 hours, according to Dune Analytics stats.
What do you think about Shapeshift leveraging Thorchain for decentralized and trust-minimized swaps? Let us know what you think about this subject in the comments section below.
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