THORChain hasn’t had an easy year. After three exploits in the space of a month during the summer the protocol’s native token (RUNE) took a beating, plummeting from all-time highs over $20.00 in May to a low of around $3.50 in late July.
Billed as a way to exchange crypto assets across different blockchains without an intermediary, the protocol disabled swaps completely as it looked to harden the network against exploits. With the relaunch of Ethereum swaps in late October, however, THORChain’s recovery was virtually complete — and the price of RUNE was within striking distance of the $20.00 mark again.
And then there was the THORSwap public sale.
THORSwap, a decentralized exchange powered by THORChain, had a successful initial capped sale that was oversubscribed by 198%, as community members stumped up a maximum of $300. But a second uncapped sale went badly wrong, as bots front-ran the Initial Dex Offering (IDO) and THORChain’s own treasury seized tokens before the public was even able to access the app.
Yet just one day later, a dip in the price of RUNE appears to be reversing, and previously-disaffected community members on Twitter are singing the praises of the THOR team. So how did THORChain succeed where countless other DeFi projects have failed to recover following hacks or exploits?
Why, following the three exploits, did some wallet holders actually donate Ether (ETH) to the THORChain protocol to help cover losses? And why, following a botched IDO, is THORSwap’s Twitter account receiving comments like “This is real @THORChain . They know how to be with the community. They know how community should be treated.”
The answer, according to some members of the community, lies not only in the fact that there is a deep commitment among participants to the decentralized ethos of the project; or even that the mostly anonymous developers and managers behind the THOR ecosystem are as diligent about community development as they are about technical implementation.
It’s about a virtuous circle of aligned incentives between the developers, the managers, the moderators, and the community that creates a genuinely antifragile economic system.
Following the IDO, THORSwap and THORChain rapidly addressed the community outrage at the mistakes that prevented many supporters from participating in the sale.
In a post mortem the THORSwap team said that “The $THOR token launch on THORChain was, frankly, a bad experience for everyone involved. We have built up trust over the years, and we understand it can easily be broken from one event like this. Many lessons were learned and we hope to regain your trust.”
But rather than simply apologizing, the THOR team went significantly further — with the THORChain Treasury at first promising to donate 10% of its tokens back to the liquidity pool, and later reallocating its entire $11.25 million THOR position to be distributed between those liquidity providers who were unable to secure tokens.
11m$ donated to