OxNguyen on Bridging Networks with THORChain
0xNguyen is an early contributor to THORChain, an advisor and investor to several projects in the THORChain ecosystem, and the creator of RUNEBase.org – an education and content platform dedicated to educating and informing people about THORChain and the THORChain ecosystem in an easy-to-understand way.
Aside from his work in the THORChain ecosystem, 0xNguyen is a serial SaaS entrepreneur (2 operational, 2 exits), and runs the ATX Crypto meetup in Austin, Texas.
Also Read: King Of Network Activity
He can be reached on Twitter @0xNguyen.
The following transcript was created using artificial intelligence. There will be some grammatical errors below.
00:00:05:21 – 00:00:25:23
Richard Carthon: Hello, everyone. Welcome to another episode of Crypto Current, your host here Richard Carthon and today’s special guest, I was able to actually meet in person at a local Austin meetup that he actually put on himself, has been very involved in the Crypto community for a while now. He’s working on a really cool project, we got THORChain and we have 0xNguyen. How are you doing today?
00:00:26:28 – 00:00:29:02
0xNguyen: I’m doing great, Richard. Thanks for hosting me.
00:00:29:19 – 00:00:37:23
Richard Carthon: Of course. We’ll thank you for joining us today. Happy to learn a lot about you and everything that you have going on. But first, let’s learn more about you. Can you give us some background on yourself?
00:00:38:19 – 00:01:37:04
0xNguyen: Yeah, absolutely. I guess I’ll begin with I’ve been working in software for most of the last 12 years, started my first software business in 2012. And then in 2014, I moved to Vietnam and started hiring a team in Vietnam. And using Bitcoin was the fastest way to send money, the fastest and cheapest way to remit money to my staff in Vietnam, so, that kind of provided my entry way into Crypto and stayed interested in it and buying since about that time. And then in 2017, during the like, 2017, 2018 like, altcoin boom, I started trading and investing in different altcoin projects. And some of them didn’t really have great branding, great identity, great websites and so, I had some members of my team start doing projects for some of these Crypto projects that I was investing in. And that quickly turned into this services business where we were doing marketing and community management services and website design and development services for different Crypto projects.
00:01:37:25 – 00:02:44:04
0xNguyen: And in 2018, one of the teams that we connected with came to us with an idea for a project, and that project went on to become THORChain today. And so, I still have my software businesses on the side, but over the last three, four years, really devoted a lot of effort into building in the Crypto space and more specifically in the last year, just helping build up the THORChain ecosystem, staying really involved, advising and investing in different projects that are building on top of THORChain, which we’re happy to talk more about today. And then, yeah, it’s been an exciting, ride. So, super excited about THORChain and then more recently what you mentioned at the top of the call, so, much of the work that we do in Crypto is online with people from all over the world and, you know, being a, you know, kind of like, socially driven person and wanting to connect with people in the area around me, you know, together with some friends here in Austin, Texas, we started the ATX meetup as well and we’ve been running that for a few months now as well. So yeah, staying involved in different projects in the ecosystem and then just community organizing locally to satisfy that kind of social connection, so.
00:02:44:22 – 00:03:26:01
Richard Carthon: Which is incredible, man and highly important. And a couple of things that you’re able to blend that I really enjoy is that you were able to find opportunities and help them with their marketing and getting out to the world and community building. One of the things that we regularly talk about at Crypto Current is the importance of building a strong community where people feel involved, can feel like they’re being empowered, educated and being brought into the ecosystem that you want to ultimately create. So, let’s just first start with THORChain. So, at its core, you know, what is it? What are you trying to accomplish? And of course, the THORChain ecosystem is very thriving. I know that just from the interactions that I’ve had with multiple people within that ecosystem. But can you just tell us a little bit more about that?
00:03:27:05 – 00:04:18:00
0xNguyen: Yeah. THORChain in its simplest form, it’s a decentralized exchange protocol, and what that means simply is it’s a way for what and makes it special is it allows users to exchange between Cryptocurrencies, between different Blockchains without going through a centralized custodial exchange. So, for example, today, if you want to trade Bitcoin and Ethereum or swap assets between Bitcoin and Ethereum, the only way to do that is to go through a centralized exchange like Coinbase or Binance or Kraken and etc. And if you think about it, that actually undermines the very value that makes Cryptocurrencies worthwhile in the first place, and that is, you know, noncustodial, completely self sovereign access and control of your own funds. Like, depositing your funds on a centralized exchange undermines that defeats the purpose entirely.
00:04:18:21 – 00:05:03:08
0xNguyen: And so, you know, in the last three, four years, decentralized exchanges like UniSwap and SushiSwap have emerged, which allow for the decentralized exchange between Cryptocurrencies, but they’ve been limited to Cryptocurrencies within a single ecosystem in a single L1 like Ethereum for UniSwap or SushiSwap or like the, you know, Binance Smart Chain for PancakeSwap. And these exchanges have done great things for, you know, trustless, noncustodial decentralized swapping of assets, but they don’t work across chains like you can’t access, you know, native Bitcoin, Litecoin, Dogecoin. You can’t trade between, you know, maybe eventually Cardano or the IBC chains or Ethereum.
00:05:03:10 – 00:05:04:16
Richard Carthon: Right.
00:05:04:18 – 00:05:12:21
0xNguyen: Using these chains. And so, THORChain now allows for that decentralized exchange between these Cryptocurrencies, yeah.
00:05:12:23 – 00:05:59:02
Richard Carthon: Which is highly powerful and it’s one of the challenges that I’m starting to see a lot with a lot of the newer products that are starting to emerge. So, you have all these different ecosystems, if you will, right? So, with a lot of Ethereum projects, you can use different things, like you know, a UniSwap to go and exchange between different Cryptos that are built on top of it. Like you said with Solana, if you have a Solana wallet, you have certain projects that are being built on that and you have to go into use that wallet, create your own thing and have it live there. The same thing with BSC and maybe use something like a Metamask where you can have the different protocols that live on that. But like, what it sounds like, like you’re saying, is to have a way to go straight to a point of access in a decentralized way and purchase these Cryptocurrencies and that is what THORChain ultimately is creating.
00:06:00:14 – 00:06:49:01
0xNguyen: Exactly. And if you look at the work that like, UniSwap or SushiSwap are doing, like, it’s significant and they’ve proven the need for this kind of model. I think, you know, UniSwap has 4.2 billion dollars in assets in liquidity pools, SushiSwap has 3.4 billion dollars in assets in liquidity pools. These are massive fares, but they’re just in the Ethereum ecosystem. You can’t pool like Bitcoin or Litecoin, or Dogecoin, you know, if you want and you can’t trade between them. And so, the use case that THORChain brings about, I mean, the model’s already proven in like, a small way with these Ethereum only decentralized exchanges. And so, the total addressable market and the kind of like, optimistic bull case scenario for THORChain is massive. And so, that’s what excites us about it.
00:06:49:17 – 00:07:06:23
Richard Carthon: No doubt. And, you know on that, I know this has been something that’s being built in a long way, but can you kind of give us just a roadmap of like where it currently is, where it’s headed? And I know and also I want to spend some time on Moonbase because I know you’re creating a lot of rich content to kind of explain and show all the different ways that THORChain can be used.
00:07:07:26 – 00:07:35:21
0xNguyen: Yeah, yeah, happy to. And this is one of the most exciting things about THORChain. This idea of cross chain exchange is a holy grail of sorts and there’s a lot of projects that have been talking about it and working on it. And THORChain and it’s a hard problem to solve, so, THORChain has been working on it for three years, starting in 2018, but it’s live now. It launched on what we call Chaos Net, which means it’s real world assets, but it’s in sort of like, in a beta state.
00:07:35:23 – 00:08:09:19
0xNguyen: So, we cap the number of assets that’s available to pool, but it’s live, you can use it. It launched April 13th, so, about three months ago. April, May, June, July, about three months ago now. You can swap between currently and last I checked it was 25 assets across five different Blockchains. So, you have Bitcoin, Bitcoin Cash, Litecoin, Ethereum and a number of ERC 20 tokens and then Binance Smart Chain and a number of BEP-20 tokens. Total value locked in what we call liquidity pools right now is around $130,000,000.
00:08:12:04 – 00:08:12:19
Richard Carthon: Nice.
00:08:12:21 – 00:09:08:12
0xNguyen: Again that’s with an artificially imposed cap on TVL while, you know, we’re still like, working out kinks in, you know, in the production code and spinning up nodes to secure the network. I have some numbers here, currently, our volume fluctuates between around 20 to $40,000,000, $2.75 billion dollars in exchange volume over the last three months, over half a million swaps performed in the last three months. And the Rune token, which I’m happy to talk more about the role that the Rune Token plays and why it’s an extremely well-designed token, in terms of value accrual and utility in the network. I don’t check prices every day, but I think it’s hovering around six or $7 right now and I believe the market cap is somewhere in the realm of 1.5 billion.
00:09:08:14 – 00:09:09:11
Richard Carthon: Wow.
00:09:09:13 – 00:09:10:14
0xNguyen: For the Rune Token.
00:09:10:16 – 00:09:11:01
Richard Carthon: Yeah.
00:09:11:03 – 00:09:14:16
0xNguyen: Which is through the THORChain ecosystem. So, that’s a snapshot of where we are today, yeah.
00:09:15:13 – 00:10:17:27
Richard Carthon: No, which is great, man. And to see where you come from from 2018 till now, it’s a beautiful thing. And something that I like to always go back to is look at projects who are building for the future and have no intention on just trying to raise a bunch of money, make a bunch of money real quick and disappear. The fact that this ecosystem is solving a problem, continuing to hit the timelines and everything that you’re kind of projecting out there and having something that people can actually use today that is needed, very important. And if you don’t mind, like can you kind of just talk about, like the importance in the value of building that community, putting in the work, because I think a lot of people are getting caught up in the sense of all of these different projects that are coming and promising the world and all these cool things that it’s going to be able to do without realizing that it takes time to build those things and that to get to a point where it’s ready to be used and understood and using everyday use cases, that it takes time. Like you said, this has been a three year process. Can you kind of just speak to that for a moment?
00:10:18:27 – 00:11:03:18
0xNguyen: Yeah. I mean, that’s everything. You know, the team is delivering the project’s delivering. It’s not vaporware, it’s real. And, you know, to your point about like, you know, the community being built around it and the time it takes and this not being kind of like a scam or pump and dump, one of the unique things about THORChain compared to other projects, but it also has similar to Bitcoin, is that the founding team is pseudonymous, like they’re actually semi anonymous. And while that might actually, you know, raise some eyebrows, for the last three years and you can go on the THORChain medium and see this, first off, it’s an open source project, anybody can see the repos, everybody can see the code, the smart wallets or the smart contracts, the assets in the wallets.
00:11:03:29 – 00:12:20:09
0xNguyen: And for the last three years, every single week, the development team has posted a weekly development update. And every month, the team has posted a very transparent treasury update where they break down. It’s like open financial statements like their balance sheet and, you know, a simplified PNL, you know, for the month, the last three years. And so, there’s a degree of openness and transparency and execution that’s on display in THORChain, which I think ties into, you know, even though there’s this kind of similar with Bitcoin, this mystery surrounding its genesis, like who the founding team is, you look at what’s been built and what’s been delivered and how like, pragmatic and just how well they deliver and I think that’s what the community gets excited about. And to your point about community, I think one of the things that THORChain has just nailed is, if you go on Crypto Twitter and this is something that I started getting into over the last six months and really deep on over the last three months since April, the THORChain community on Twitter is I mean, I’m obviously hyper biased, but it’s just it’s amazing. It’s one of the greatest.
00:12:20:16 – 00:13:29:03
0xNguyen: I think the Link Marines are really well-known and famous for being like, a just a really strong community. The THORChain ecosystem and community on Twitter is also just extremely strong. If you ever see like this lime green, it’s like a green to aqua blue gradient halo that circles people’s avatars on Twitter, that’s the badge or signal of the THORChain ecosystem. And there’s a number of really, you know, well-spoken, educated, you know, sudo-influencers, I don’t love that term, but, you know, influential accounts in the ecosystem that I’ve started to dabble in as well. On Twitter, I’m 0xNguyen and we can drop that in the show notes. And it’s just a great community of people who are excited about the project because of, you know, what it promises to do, what it’s delivered. And you have the strength of, you know, almost everything around the project so far. So, without sounding like, too biased or bullish, yeah, I’m just extremely happy and excited to be a part of the community. It’s a great one to be engaging in.
00:13:29:15 – 00:13:51:08
Richard Carthon: Absolutely. And I’ve actually seen some pictures with people with that and never knew, so, now I know. And I’ll be able to call it out next time I see, so, thanks for pointing that out. But, you know, for a person that’s listening to this right now and they’re like, Wow, this sounds really great, I’ve actually been looking for something like this, you know, how would someone come on and start using the THORChain and start being able to engage in getting some of these different assets?
00:13:52:24 – 00:14:13:03
0xNguyen: Yeah, yeah. I think there’s a couple of things to think about here. I mean, there’s the product using, you know, using THORChain itself to exchange between assets. You can also, you know, like, I imagine a lot of your listeners are familiar with, like, liquidity pools and how Iike Dex’s and automated market makers like UniSwap and SushiSwap work.
00:14:13:05 – 00:14:13:20
Richard Carthon: Right.
00:14:13:22 – 00:14:18:18
0xNguyen: Like, give me an idea. Like, who are your listeners? How familiar are they with, like, UniSwap, SushiSwap?
00:14:18:29 – 00:14:28:29
Richard Carthon: Pretty familiar. So, we have a large spectrum. So, we bridge the gap between people who know nothing about Crypto and Blockchain with thought leaders in the space. So, we have everyone from your newb to your absolute Crypto OG and everything in between.
00:14:29:01 – 00:15:50:15
0xNguyen: All right, cool. So, I’ll speak kind of to the middle of that then and kind of assume some amount of understanding, but then also just provide some additional context for those who might not understand yet. But, you know, these decentralized exchanges like UniSwap or SushiSwap, there are users who swap between assets, you know, like I want to swap my Ethereum for, you know, Chainlink. And so, I come to UniSwap.org Sushi.com and I swap, I make that swap. And when I make that swap, I’m trading in and out of what are called liquidity pools. Liquidity pools are static pools of assets that other users on the network have deposited into the network for other users to trade against. In exchange, they earn a percentage of the exchange fee that the traders pay, right? So, you have liquidity pools that are pulled by liquidity providers and then you have traders that come in and make a trade in and out of those pools and they pay a little bit of a fee. That fee goes into the pool and is eventually passed on to liquidity providers. And this is commonly referred to as AMMs or automated market makers or decentralized exchange more broadly store. THORChain borrows on that notion and except that it, you can pull liquidity and trade between assets across different Blockchains.
00:15:50:17 – 00:16:44:00
0xNguyen: Again, so you can trade between Bitcoin to Ethereum to Litecoin to, you know, BEP-20 tokens and ERC 20 tokens, etc. And so, there’s multiple ways to participate in this. As you know, someone who’s interested in checking out THORChain. I’ll explain like, from top to bottom and then for those, I imagine there’s also people and obviously this isn’t financial advice, talk a little bit about, you know, the Rune Token and how to get exposure to the growth of this network if it’s something that you’re excited about. First, as a trader, if you want to swap between assets on different Blockchains without going to a centralized intermediary. So, this is without using Bitcoin, I mean sorry, without using Binance or Coinbase or FTX. You know, you can just use any THORChain powered exchange, like ThorSwap.Finance Asgard.Exchange, Skip.Exchange.
00:16:44:14 – 00:17:19:17
0xNguyen: There’s multiple different exchanges that integrate with THORChain and you can just go to one of these exchanges and swap your assets. Another interesting thing about THORChain, which we don’t have to get too technical here, but talking is itself, users won’t interact with THORChain directly. I hope this doesn’t get too confusing. It’s kind of like email. Email Is underpinned by a protocol called the Simple Mail Transfer Protocol, and users don’t interact with the Simple Mail Transfer Protocol directly, they interact with email applications like Outlook.
00:17:19:19 – 00:17:20:04
Richard Carthon: Gmail.
00:17:20:06 – 00:17:49:22
0xNguyen: Or Apple or Yahoo! Mail or Gmail. Exactly. For THORChain, you would just use an exchange that integrates with THORChain. And so, I mentioned a few already and then there’s even exchanges that you’re not even going to realize are using THORChain on the back end and this is going to become more and more common. So, Trust Wallet has already integrated THORChain Rune Token, and they will be integrating THORChain as a decentralized exchange on the back end shortly. ShapesShift, who many of your users will probably be familiar with.
00:17:49:24 – 00:17:50:09
Richard Carthon: Yep.
00:17:50:11 – 00:18:20:10
0xNguyen: Integrates THORChain on the back end. So, if you’re trading between assets on ShapeShift, you’re actually using THORChain’s liquidity pools. So, from an exchange layer, you know, it’s very simple. Just go to one of these exchanges and you can create assets, super simple. The second layer down, if you want to earn yield on your assets like Bitcoin or Ethereum or Binance Coin, you can provide liquidity into THORChain liquidity pools and you can do that through a lot of these exchanges that I already mentioned.
00:18:20:12 – 00:18:46:10
0xNguyen: So, ThorSwap.Finance is a great place to go or Skip.Exchange is another great exchange and there’s many more to come. We can talk about the integrations to come a bit later. And by the way, if anybody wants to go learn more about this, we’ll talk about this, but I have a website dedicated to educating on these techniques. It’s RuneBase.Org. So, a little shameless self plug there.
00:18:46:12 – 00:18:51:07
Richard Carthon: No, great plug. it’s highly educational. Thank you. I was actually going to bring this up in a moment.
00:18:51:09 – 00:18:51:24
00:18:51:26 – 00:18:54:03
Richard Carthon: But absolutely bring this up right now. So, RuneBase.org.
00:18:55:01 – 00:19:36:04
0xNguyen: Yeah. Well, highlight that, so, if any of this kind of, you know, isn’t coming through over just like, audio right now, you can go and I have video and written guides on most of these components. And so, you can provide liquidity by pooling your assets into these THORChain liquidity pools and then you can earn percentage yields. And some of these percentage yields are upwards of 20 to 30 percent on things like Bitcoin, Ethereum, BUSD, USDT, etc. And so, you can provide liquidity. There’s other ways to provide in the network like, you know, securing a node on the network or becoming an arbitrageur, but those are slightly more technical and I think a bit out of scope for this conversation.
00:19:37:22 – 00:20:39:21
0xNguyen: And then, the last thing I’d mention is for anybody that’s excited about THORChain and wants to participate in the growth of the network, there is the Rune Token and Rune is the native token for the THORChain ecosystem. And what excites the THORChain community about the Rune Token is that, I think the first thing to note is that not all tokens are created equal. Different Crypto projects have different degrees, build or design different degrees of utility for their native tokens and how well, how much utility that token has within that network will create different levels of what’s called like, value accrual. So, if a network is growing and a token is extremely important and critical to run that network, that token role will grow as the network grows in value. But then there’s tokens, frankly, like Ripple or the UniSwap Token, which aren’t really directly, they don’t have that much utility.
00:20:39:23 – 00:20:40:12
Richard Carthon: Exactly.
00:20:40:14 – 00:20:43:07
0xNguyen: Associated with the actual use of the platform.
00:20:43:09 – 00:20:43:28
Richard Carthon: Right.
00:20:44:00 – 00:21:20:08
0xNguyen: Like the UniSwap Token, you don’t need it to provide liquidity, you don’t need it to exchange on UniSwap. The UniSwap Token is a governance token that helps you, that gives you a vote in what and where to direct the UniSwap treasury funds. And so, it doesn’t have that much direct value associated with the growth of the UniSwap network. The Rune Token’s importance and value and utility in the THORChain ecosystem gives it a lot of just world class value accrual. And really quickly, I’ll just give like the high level overview of what that looks like.
00:21:20:10 – 00:21:20:25
Richard Carthon: Yeah.
00:21:20:27 – 00:22:32:22
0xNguyen: And how you can calculate a baseline value for the Rune Token. So, essentially, the Rune Token serves a few purposes in the THORChain ecosystem, but the two that are the most important for the purpose of this conversation are that any liquidity provider must pool Rune Token alongside the other asset that they want to provide liquidity for. And we’ll talk a bit about that. So first, as the liquidity base pair asset and the second would be as a security deposit that node operators have to deposit to the network in order to earn yield on that and to secure the network. And so, really quickly, as a base payer liquidity asset, we mentioned earlier that liquidity providers on the THORChain ecosystem can pool their Bitcoin or their Litecoin or their Ethereum or other tokens into THORChain liquidity pools for other traders to trade against. When they deposit that Bitcoin or Ethereum onto the network, they have to pull at the same time, Rune Token one to one in terms of dollar value.
00:22:32:24 – 00:22:34:06
Richard Carthon: Yeah.
00:22:34:08 – 00:23:36:12
0xNguyen: When they do this, when they provide this liquidity. So, if I want to pull $1,000 worth of Bitcoin, I have to also pull at the same time $1,000 worth of Rune Token. And every pool in the THORChain network is made up of the main asset plus Rune. So, Bitcoin plus Rune, Ethereum plus Rune, BUSD plus Rune. And then every trade happens in and out through those pools with Rune as the middle class. So, if you want to trade from Bitcoin to Ethereum, what’s happening on the back end is the trader is being routed from Bitcoin to Rune to Ethereum and then back out to the user. So long story short, with this one-to-one, symmetrical pooling, it creates a one-to-one value of Rune to total value locked in liquidity pools. It’s a base, it’s a floor demand for Rune Token. And so, that’s part one. Part two or first, do you have any questions about that or was that clear?
00:23:36:29 – 00:24:20:28
Richard Carthon: No, so far I’m following along. And I’m sure with it, I know that you have some content and videos and we’ll make sure to go and add those into like, for people that want to go and follow along this, because for the newbs out there that are listening to this, it might be a little over your head. That’s okay, but something like this is important to learn early because what right now with Mr. Nguyen is sharing with us is a ton of different ways that you can earn money and yield within your Crypto, right? Within ecosystems you now have anywhere from two to four different ways by being a part of the ecosystem that you can earn money. And what he’s trying to do is explain those different ways that you can go and accomplish that. So, if earning a little bit more money with Crypto, you already have interest you, keep tuning in and keep following along. But yes, by all means, please continue.
00:24:21:20 – 00:24:50:27
0xNguyen: Yeah, absolutely. And to that point I’m pretty, actually depending on when this airs, it’ll probably be live already, I’m going to ship it tomorrow or on Tuesday, I’m releasing a free friendly, I’m calling it the Friendly Guide to THORChain and it has visuals for everything I’m talking about now. So, I’m imagining just hearing me talk about this can be confusing, but I kind of animate this with some visuals in the friendly guide to Thaw Chain. So, that’ll be available at RuneBase.Org here in the next few days.
00:24:50:29 – 00:24:56:04
Richard Carthon: Awesome. And we’ll make sure to include that in the show notes for everyone listening if you want to keep learning a little bit more about that.
00:24:57:07 – 00:25:56:14
0xNguyen: Awesome. And so, what we’re talking about right now is the baseline value for the Rune Token and where it’s going to derive its value from as the THORChain network grows. The first thing we mention was this base pair assets, so, all equity providers have to buy Rune in order to stake assets on the THORChain network and yield on it. So, that’s part one. And then part two is as a security deposit that node operators have to deposit in order to earn yield on in order to secure the network in exchange for rewards from the network. And so, a node in the THORChain ecosystem is our users who are running the THORChain application. So, they are managing the wallets, they’re securing assets in the system’s wallets and smart contracts. They are running the THORChain application, they are verifying inbound transactions when someone makes a swap and they are sending outbound transactions to that swapper.
00:25:57:10 – 00:26:19:22
0xNguyen: And so, these are the machines that are like, you know, powering this system. So, similar to like, miners for Bitcoin or Ethereum, right? In order to run a node, the node operator has to bond a lot of Rune. And right now, I think that’s around $5,000,000 with a Rune and I think that will grow to $1,000,000 Rune. It’s somewhere between three to five million dollars worth of Rune today, and that’ll grow over time.
00:26:20:15 – 00:26:44:13
0xNguyen: So, they have to bond a lot of Rune and what that does is it aligns their incentives. It gives them skin in the game because these node operators, it’s like a security deposit for a tenant, right? When you lease an apartment or you lease a house, you need to put down a security deposit. Like, that security deposit could be slashed if you have bad behavior, right? if you like, you know, put a hole in the drywall or something.
00:26:45:09 – 00:26:45:24
Richard Carthon: Right.
00:26:45:26 – 00:27:23:11
0xNguyen: And so, the same is true for these node operators. The bond, the Rune that they have to deposit serves as their security deposit. It can be slashed for bad behavior, but then they earn yield on that deposit. And right now that yield, it fluctuates between I think I want to say, around 20 to 30 percent, I haven’t checked in a few days. And then, they also and so collectively, all the nodes on the THORChain network have to bond or have to deposit twice the amount of assets that are pooled in liquidity pools and Rune, in terms of dollar amount, right?
00:27:23:13 – 00:28:40:00
0xNguyen: And so, what that does is it creates this economic disincentive, even though they have a position of technical, like, control over the system funds, at any given point in time, they actually have more to lose in their value of Rune than they they stand to gain by abusing their position of power and, like, for example, draining funds from the system wallets. And so, they’re economically incentivized for bad behavior. And so, in summary, the baseline demand and value for Rune Token comes from liquidity providers pulling Rune one-to-one with TVL and from node operators pulling Rune two-to-one to TVL. And so, you have a floor price for Rune. If you add those up, the floor price and the floor demand for Rune Token is going to equal three times the total value of non-Rune assets pooled in THORChain liquidity pools at any given point in time. And so, this is highly summarized as 3X TVL is what’s known as the baseline or deterministic value for the Rune Token. And so, that’s that kind of, that’s the baseline utility that the THORChain Rune Token offers.
00:28:40:12 – 00:29:09:26
Richard Carthon: So, yeah. Thanks for bringing that down. And no, I mean, I know there was a lot of different sections of it, but it’s good to know because a lot of times we’ll have these projects or people that will come and talk about this as a very high level without having someone come in, like break it down for people to follow along with. So, for everyone, if this is your first time hearing that, please go back, re-listen to it. And it’s good to just familiarize yourself with these different terminologies and ways that you kind of flow through how all this works.
00:29:09:28 – 00:29:49:25
Richard Carthon: And so, again, we’re also going to have it in the show notes, a video of Mr. Nguyen going into a deeper dive of this. But again, thank you so much for diving into that for us. Just a couple of more things that I kind of want to dive into. And what I think would be really fun to hear just from your side of things is just the current outlook of Crypto and where we’ve been from the beginning of the year to where we are about midway through the year now and where you potentially think things are headed. So like, if you have to take a holistic 10,000 foot view and you could look at either the rest of this year or even the next, you know, two to five years, what do you think are some things that are on your mind that you think other people should be looking out for as well?
00:29:51:00 – 00:30:13:09
0xNguyen: Aw man, I could geek out on this all day. Where to begin? Yeah, one of the things that’s super interesting about Crypto to me is like the macro geopolitical game theory that’s happening. You have, for example, like, China was never going to play. You know, that was always going to happen. You know, they locked down the open Internet, you know, a decade and a half ago. Obviously, they were going to lock down Crypto. So, that’s not too surprising.
00:30:13:23 – 00:31:19:06
0xNguyen: A big open question for me is what US regulation is going to look like over the coming years or months. I think this is a current hot topic and this is actually, you know, like a geopolitical game playing out right here. Like, the US has, I mean, it’s in this kind of interesting spot. It has a lot to lose as you know, it had the US dollar as the global reserve currency, the US financial like, traditional financial system is, you know, the seat of it, is in the United States. And, you know, it might, the US might be facing a sort of like, you know, Steven Christian innovator’s dilemma, you know, classic innovator’s dilemma here where like, you know, does Bitcoin and decentralized finance kind of unseat and wrestle away a lot of the leverage that the US has over the world? At the same time, everybody wants the next Silicon Valley to be, you know, on their shores and if that’s happening now in decentralized finance, does the US, you know, let this evolution happen in the United States or does it, you know, come in with heavy handed regulation and push this out?
00:31:19:15 – 00:32:09:06
0xNguyen: So, for China is always going to be no, for the US, it’s not a no brainer in either direction. There’s a real kind of like, tricky, you know, game theory equation to navigate there. And then you have this whole world and this is what you’re starting to see play out in Latin America, El Salvador and in other Latin countries that are like hell yeah, like, let’s embrace it, we have nothing to lose. We can depoliticize our money, we can depoliticize our financial infrastructure. Our citizens can get access to world class banking, world class currencies, financial products, banking products and investment opportunities like these things were traditionally like you had to have a US bank account and password or European bank account and password to access these. So, the dream of like, global decentralized finance is like, playing out, I think, in real time now in developing countries, which is exciting.
00:32:09:21 – 00:33:13:18
0xNguyen: I do think that, you know, and I’m not a lawyer and so, I’m not super deep in this space, but, you know, US regulations is the biggest open question for me. And I think, you know, I think what it looks like, I really think at the protocol level, there’s not too much to worry about. I think like protocols, like THORChain in my opinion are, they’re not the user interfaces and I think where regulation is going to come down is going to be on things like, you know, KYC, AML, just clamping down on the completely anonymous component, synonymous, unidentified component of a lot of decentralized financial services. And so, what I think might be, you know, might be a realistic thing is like, US based front end interfaces and applications will no longer be able to access. We’ll be able to, you know, provide these same services without being responsible for an updated guidance on, like, what kinds of services have to do, KYC and AML, like, provide identifying documents.
00:33:14:21 – 00:33:56:24
0xNguyen: But I think broadly, you know, these protocols will still exist to underpin, like, underpin all of these front end services. So like, SMTP, Https, TCPIP will exist. And I think Ethereum, THORChain liquidity pools, you know, Chainlink, you know, Oracle protocols, like, all of these like, open protocols, it’s, you know, it’s going to be hard to lock them down, hard to regulate them because of their, you know, technical nature. But yeah, broadly I’m extremely bullish on the space, I’m very interested in seeing how US, you know, regulation will start to unfold over the coming months and years. And I think I think it’s an inevitable frontier that it’s extremely exciting to be living through,
00:33:57:16 – 00:34:16:02
Richard Carthon: No doubt. And thanks for for breaking all those down. There’s a couple of things in there that, like, I strongly feel the same. The US regulation, although during COVID, they kind of just took it back and said, “Look, y’all do what you do.” Now, you’re starting to see, you know, like Elizabeth Warren’s basically saying by the end of July, we need to have some more regulations around this or trying to figure out what they want to do.
00:34:16:05 – 00:35:03:00
Richard Carthon: I agree with China. So, even with China, like, they were never truly going to play nice because they’re going after CBDCs and I think they’re going to be the first one to really roll out the digital one and make the rest of the world try to get on board with using that as a currency. So, of course, they’re going to try to push that away. So, that’s a whole nother topic for another day, but happy don’t pack that with you one day. And then, just as the the rest of the world, more developed countries, like you said, it’s providing this access to a potential more stable currency/opportunities, opportunity for a currency that could appreciate in value instead of absolutely getting demolished and inflated, as well as having power to use that then asset to get some of those institutional opportunities that and access to ways to make money that they otherwise wouldn’t have.
00:35:03:21 – 00:35:26:19
Richard Carthon: A great way that someone, always break this down, like, if you had to flee your country right now and what asset would you bring with you? And this is the United States, this is any country, period. If you had to flee your country right now, what asset would you want to have? And I mean, the quickest answer is probably Bitcoin, because you can put it on a flash drive, you can get out of there. You can then go to whatever countries, switch it to the local currency and you’re good to go.
00:35:28:07 – 00:35:50:09
Richard Carthon: So, yeah, man, I definitely appreciate that take and on that man, you’ve dropped a ton of knowledge for us, we have a lot that we can unpack. But kind of, as we kind of wrap up, I have a final two questions for you. One is, with all the knowledge that you have right now, if you could impart one to two pieces of wisdom to yourself when you first got started or to that Crypto newbie, you know, what would you tell yourself?
00:35:51:22 – 00:35:59:15
0xNguyen: Ooh, man, am I going back in time here because that I could make a specific purchase recommendation or am I talking to a newbie today?
00:35:59:17 – 00:36:01:18
Richard Carthon: To yourself or a newbie however you want to do that.
00:36:01:20 – 00:37:06:13
0xNguyen: Today? Okay. Let’s see. Man, that’s an interesting question. What would I tell a Crypto newbie today? It’s not a succinct answer, but it’s kind of like a meta learning thing, which is like how would I recommend someone go about learning more about Crypto. You know, finding trusted sources, I think is a big deal. And in the Crypto space for me right now, I think the best education, finding, two things and hats off to you, finding good YouTube channels, I think is a great entry point. You know, YouTube channels, you know, you get the audio plus the visual component and you find someone who, you know, knows what they’re talking about. And there’s a lot of, you know, obviously a lot out there you got to wade through.
00:37:06:15 – 00:37:07:00
Richard Carthon: Yeah.
00:37:07:02 – 00:37:22:08
0xNguyen: And there’s a lot of noise. And so, you find the right signal. You know, you can do great by that, so find a YouTube that you trust. And another thing would be Crypto Twitter. Crypto Twitter. I never got it before three months ago.
00:37:22:10 – 00:38:00:00
0xNguyen: Like, in the last like, this year really, I never got Twitter more broadly. I mean I always had it, but I didn’t really go deep on it. And then, you realize over time that Twitter is the only medium that moves as fast as Crypto, you know, at the speed of development of Crypto. Blog posts, even YouTube, but blog posts and websites and, you know, like Medium, they don’t move in real time with the flow of new information that’s happening. So, when, like, critical things break, it’s breaking on Twitter and propagating through the community that way.
00:38:00:02 – 00:38:50:02
0xNguyen: And so, you know, finding, you know, key accounts to follow in the ecosystem. One trick I like to do is if I find a new token that I want to research, if you search there what’s called cashtags on Twitter. So like, for example, I’m talking about THORChain, if you search $Rune or if you’re in Ethereum, you search $Eth and you look for the latest posts, top posts for that search, you know, you can find the most relevant posts in that ecosystem. And of course, a lot of people are spamming those hashtags, so, you kind of got to wade through some of the muck there sometimes. But, and then, you start to follow the best accounts and you kind of want to be a little bit critical and curate, you know, your Twitter feed, you know, very patiently and pragmatically. And that’s where you can really tap into some of these communities. And then if I may add, one more thing that I would say.
00:38:50:04 – 00:38:51:15
Richard Carthon: Yeah.
00:38:51:17 – 00:39:44:19
0xNguyen: Is that, you know, these projects are always open to people getting involved the way that I’m getting involved, because I’m not an engineer and I’m also non technical and I’m also not like a crazy deep finance or economics mind, you know? And so, like, if I want to get involved, what’s my role going to be in something like THORChain? Extremely technical on one end and extremely financial and economic on the other end. Like, you know, there’s some really, you know, every conversation I’m in, I feel like I’m the smallest brain in the room, which is a nice place to be. But there’s a role for me, you know, like I digest this content and then I can educate on it and I can teach people that I can explain it in a way that other people can understand. And that’s something that, you know, a lot of the developers or engineers like, either, you know, don’t necessarily have that empathy for normal, you know, normal minded people or they just don’t have the time, you know, they’re just busy building.
00:39:44:21 – 00:40:08:22
0xNguyen: So, there’s a, you know, you can get involved in these projects and take initiative and find yourself a position and be working in something that for my money, is like the most exciting, intellectually engaging, financially, you know, financially opportunistic and even philosophically or politically or socially kind of engaging industry that I’ve ever been a part of. So, just find your entry point and get involved.
00:40:09:13 – 00:40:28:11
Richard Carthon: I think that’s great advice. Keep finding great resources and making sure you’re being around people who aren’t just chilling and trying to get you to buy a thing, but engaging and actually trying to empower you so you can go and make your own decisions. But, you know, as we wrap up here, 0xNguyen, you know, what is a final thought that you want to leave with everyone listening?
00:40:29:27 – 00:41:06:25
0xNguyen: Man, final thought. So, aw man, I can go in many directions and I want to like, my initial thought is like, don’t chill, don’t make it a chill. But I mean, one of them would be like, I’m so enthusiastic about THORChain, so, keep your eyes on that. And, yeah I mean, just, for me, I know, I’ll touch back on this like, Crypto for me and for a lot of other people it’s the most, and I’m sure a lot of your audience would be able to relate to this, so, depending on who I’m talking to here. You know, this could be like I’m preaching to the choir.
00:41:07:06 – 00:42:03:10
0xNguyen: But, you know, it’s just like the excited about don’t worry about the price movements, be excited that this is like, one of the most foundational, you know, technical and financial innovations, you know, in human history and we’re right on the cutting edge of it. And you can find so many ways to be fascinated by it, whether it’s with the, you know, money to be made or the technologies and the products to be built, the social aspects of how this can be a democratizing force, an inclusive force for, you know, financial freedom and sovereignty across the entire world, whether you’re into economics, geopolitics, game theory, whether you’re a Crypto anarchist or you’re a libertarian or you’re liberal or conservative, there’s so many ways in which you can be excited about Cryptocurrencies and Blockchain technology. And yeah, just let that passion and that excitement carry you and don’t worry about the short term price fluctuations,
00:42:04:01 – 00:42:32:03
Richard Carthon: No doubt. It’s that passion that’s important. And everyone listening, I’m sure, could hear your passion today. So, thanks for coming and sharing all the information that you did. But of course, as we kind of bring this to a close, what are ways that people can connect with you, learn more about THORChain, get access to all the information that you dropped and I believe that’s RuneBase.Org. And then also, if they happen to be in Austin and want to come to one of the meetups, if you want to add any of that information as well.
00:42:32:27 – 00:43:14:08
0xNguyen: Yeah, yeah, absolutely. So, yeah, to get a hold of me, it’s on Twitter 0xNguyen, N-G-U-Y-E-N. And my resources are all for free, I’m not selling anything. So, it’s RuneBase.Org. On Twitter as RuneBase_org and you can search that on YouTube or any podcast platform, Spotify, Stitcher, Apple podcasts. And then in terms of, you know, our local meetups, if you’re in Austin or the local area, you can find us at ATXCrypto.Org or on Telegram, ATX_Crypto and connect with the community there. So, I’ve got a few fun things in the works, yeah.
00:43:14:15 – 00:43:20:00
Richard Carthon: Awesome. Well, Nguyen,thank you so much for joining us. And of course for everyone listening, Stay Crypto Current.
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