Thorstarter — The Valkyrie Launching New Projects into Liquidity-Valhalla
Introduction
This article tries to summarise everything we currently know about Thorstarter and why we as Qi Capital chose to partner with Thorstarter as strategic investors. Thorstarter is the first IDO launchpad platform built on top of THORchain, trying to grow the THORChain ecosystem and provide deep liquidity for (new) long-tail crypto assets.
Two trends and developments have led to the creation of Thorstarter. First, the success (and partly the necessity) of launchpad platforms in DeFi, which target fundraising for early-stage crypto projects, and secondly, the development of THORChain’s cross-chain liquidity platform for layer 1 blockchain assets.
The Rise of Launchpads
Over the last months, countless launchpad platforms have been created across various decentralized (nor not so decentralized) blockchains and centralized crypto exchanges. Some examples are Binance Launchpad, Polkastarter, Solstarter, Launchpool, and BSCPad. Several factors have led to this trend:
- The rise of DEXs such as Uniswap suddenly allowed for any new project to launch their own token easily, but the number of new projects got out of control, and many people were looking for some vetting of new projects by a trusted entity.
- The IDOs (Initial Dex Offerings) on Uniswap often led to whales and bots front-running subsequent investors at low prices and then dumping on them. Handling better IDO models like through LBPs (Balancer Liquidity Pools), which offers a better design for initial distribution, is quite complex for both users and token issuers.
- The high gas fees on Ethereum during the first half of 2021 scared off many investors from participating in IDOs, and smaller investments were rendered useless because of them. This led to a shift to alternative underlying blockchains for new projects, which benefited primarily Binance Smart Chain, Polkadot, and Solana.
Therefore, the main benefits of launchpads are an initial review of upcoming IDO projects, a low barrier to entry in terms of fees and complexity, and some community-building initiatives. Most launchpads utilize their own token to facilitate this, typically providing project allocations to its holders, respectively stakers.
THORChain — The One Cross-chain Liquidity Protocol to Rule Them All
The other catalyst for the Thorstarter launch has been the growth of the THORChain ecosystem. THORChain itself evolved into a full-fledged cross-chain liquidity protocol with its “Multi-chain ChaosNet” (MCCN) currently in beta, allowing to swap layer 1 blockchain assets such as BTC, ETH, BNB, LTC, and BCH in a non-custodial way.
This has led to more and more projects trying to build on top of THORChain, like DEX interfaces (Thorswap, Asgardex, Vanaheimex), wallets (XDEFI, Thorwallet), and other projects (Brokkr). Additionally, several long-tail assets have been recently competing on getting listed on THORChain.
The Problems Thorstarter is Trying to Solve
Thorstarter is trying to solve some distinct challenges when it comes to launchpads and missing liquidity for long-tail assets on THORChain.
Unfair Fair Launches
One of the original reasons and ambitions of launchpads has been offering fair launches. In reality, what they ended up with was either benefiting whales (as they could reserve a majority of new tokens by staking massive amounts of tokens) or toxic shilling by influencers (or KOLs, Key Opinion Leaders) who in return received high private sale allocations. Other potential IDO investors are often forced to create artificial hype across social media in order to get some small early sales allocation.
But this hasn’t stopped more and more launchpads from entering the market, which might lead to even more absurd levels of shilling and aggressive competition. In the next chapter, we will explore how Thorstarter aims to stay true to some of the core principles of fair launches to counter this current trend.
Missing Liquidity for Long-tail Assets
THORChain, on the other hand, is in its current form not built for providing liquidity for long-tail assets but rather focused on major assets like native BTC, BNB, and top ERC20 tokens. Long-tail assets cannot access TC’s cross-chain liquidity unless they’re approved by the protocol — leading to a liquidity competition for every new pool (there is one new pool every three days) that new projects cannot win.
What Does Thorstarter Bring to The Table?
Thorstarter’s main objective is to support promising new projects based on an improved IDO model in order to grow the THORChain ecosystem.
One important vehicle for this is to enable cross-chain swaps for these new long-tail assets. Thorstarter’s native token $XRUNE is used as the settlement currency between these new projects (IDOs) and existing liquidity on THORChain.
The protocol itself acts as a launchpad on top of THORChain. New projects can simply apply for an IDO on the website but in order to be selected for approval, they need to go through a vetting process which is governed by a community DAO (we will cover the DAO in the next chapter) respectively the “Council of Asgard” consisting of nine community representatives.
Funding New Projects With a Liquidity Grant
Approved projects will receive a liquidity grant from Thorstarter allowing them to swap native THORChain-pooled assets with their token through XRUNE as a relayer token. This is unique in the launchpad space and will help the project to attract a healthy number of launch projects.
The Role of XRUNE in More Detail
Thorstarter’s approved IDO projects will get liquidity paired with the XRUNE token which again has deep liquidity on THORChain with RUNE, acting as a relayer token to tap into THORChain’s liquidity between major layer 1 crypto-assets (e.g. BTC, LTC, ETH, BNB, BCH).
So a typical transaction would for example look like this (“TKN” is the IDO long-tail assets):
TKN:XRUNE → XRUNE:RUNE → RUNE:BTC
Thorstarter will support multiple different blockchains, so that the IDO token can for example be an ERC20 token traded on Sushiswap. Thorstarter will then deploy XRUNE on a respective DEX/blockchain and/or incentivize respective liquidity providers.
What Advantages Does This Model Have for New Projects?
- Users (holders, traders, supporters) of the IDO project can access liquidity from other blockchains, without using synthetic or wrapped assets.
- Approved projects receive an upfront liquidity grant and investment from Thorstarter.
- They get the support of both THORChain and Thorstarter communities and marketing arms.
- They are liquidity providers of their token and XRUNE and share a common interest in the growth of the Thorstarter idea.
What are Potential Weaknesses?
This model poses also some weaknesses and not all details of the proposed functionality are yet fully clarified. Let’s cover a few of those potential risks:
- Thorstarter will deploy XRUNE/TOKEN pools across different chains and DEXs, limiting the potential liquidity depth of the respective pool — e.g. such pools will probably never be as deep as one central XRUNE/ETH or RUNE/ETH pool - leading to potentially higher slippage. As the number of successful IDOs grows, the buying power of XRUNE will likely increase and mitigate this issue.
- Each trade needs to go through multiple assets and DEXs, doubling the fees and slippage costs on the way but you could argue that this is the price to pay to bridge assets between layer 1 blockchains in a non-custodial way.
The Thorstarter DAO and How It Works
As mentioned above, Thorstarter plans to evolve into a complete DAO structure in the mid-to long term with its most important mission to review potential new IDO projects.
At the beginning, Thorstarter has established the following key principles for the DAO:
- Projects that use and grow alongside THORChain and follow a fair launch mechanic will be prioritized.
- A DAO (called Age of Asgard), with voting weight given to a council of nine members known as the Council of Asgard, will be responsible for project selection.
- Council members earn and retain their voting rights based on the number of tokens held, proven experience and support of the THORChain ecosystem, as well as active participation in voting on and supporting new projects which launch on Thorstarter.
- After launch, the Thorstarter DAO will handle Council member approvals and any changes to the governance structure.
Later after the launch, the Council of Asgard will evolve into the “Valhalla DAO”, where Council members are determined by the number of voting tokens held, as well as their contributions to the network.
Read more about the governance structure here: https://blog.thorstarter.org/thorstarter-asgard-governance-council-and-project-selection-process-88639c63ee3d
Thorstarter’s Own IDO
Before Thorstarter can act as a launchpad for new projects, it first needs to handle its own IDO. The team’s objective is to conduct a fair launch where tokens end up in as many hands as possible. This also includes an initial airdrop.
To achieve this, Thorstarter defined a 3-stage token launch model that looks like this:
- Private Round: Committed RUNE ecosystem supporters. (Investors are covered in more detail later in this article)
- Strategic Round: Open to all. Must have RUNE to participate.
- Public Round: Open to all.
The Private Round has been raised half in RUNE and half in ETH whereas 10% of the total supply of XRUNE tokens will be minted as part of the initial liquidity bootstrapping event. This was also done to deploy the RUNE-XRUNE pool on THORChain with sufficient liquidity. The private sale price for XRUNE has been $0.02 per token.
The Strategic Round — which will be fully open three days long (date is not yet announced) will allow participants to initially acquire XRUNE at 50% of the price of the Private Round (price per token will therefore be $0.01). They can buy XRUNE by submitting RUNE asymmetrically to this pool. At this point in time, XRUNE will not yet be tradable, users can only add RUNE to this pool and get XRUNE in return. In order to prevent whales 🐳 from grabbing all the tokens, Thorstarter will use a slip-based curve, where slippage increases with trade size.
The Public Round will be initiated by XRUNE being added to an XRUNE-ETH pool on SushiSwap, at the same price as the THOR RUNE-XRUNE pool. Thorstarter will keep the price of XRUNE constant in the SushiSwap pool for a maximum of 24 hours based on the remaining XRUNE minted at genesis.
What is special about this launch model is that all early contributors end up as liquidity providers — either on THORChain or on Sushiswap.
On top of this 3-step model, Thorstarter also decided to conduct an airdrop open for everyone. The registration started on June 9th, 2021, and has been open until Friday, 11 June at 12 pm UTC.
This airdrop was planned in cooperation with the THORChain-incubated Web3.0 wallet XDEFI.
XRUNE Tokenomics
XRUNE will have a total supply of 1,000,000,000 tokens which can be broken down like this:
The ecosystem fund is reserved for providing liquidity to projects IDO’ing on Thorstarter.
Token Emissions Schedule
The XRUNE token follows an emission schedule over 10 years, whereas most emissions stop after 4 years except for the ecosystem fund distribution.
The Thorstarter Team and its Advisors
The Thorstarter team consists of a group of pseudo-anonymous THORChain community members, long-time RUNE investors, and privacy supporters.
- “Bjørn Svensson”: Leading the development team with a background in security engineering.
- “Hafþór Ragnarsson”: Responsible for Thorstarter’s integrations and smart contracts. Background in enterprise IDaaS.
- “Tormod Lindströ”: Running business strategy, communication and community.
Additionally, Thorstarter signed up a few advisors, well known in the THORChain ecosystem. Qi Capital is very proud that three of those are also amongst its members.
The Investors Backing the Project
Thorstarter decided to collect $1.5 million in initial funding through a private round, led by True Ventures. The team highlighted that only investors with strong ties to the THORChain ecosystem and a strong belief in its growth were able to join the private round.
Other participants of the private round include:
- NineRealms Capital: Focused on supplying institutional capital for THORChain projects.
- IDEO CoLab Ventures: Early investor in distributed web startups including OpenZeppelin, Handshake, and Fairmint.
- Proof Group: Led by Noah Jessop, one of the core developers at Facebook’s Libra project.
- Meta Constant: SEAsia investment group, notably advising a16z-backed Element Finance.
- Qi Capital: A global group of private investors and builders with strong ties to the THORChain ecosystem.
- Brilliance: Venture Capital fund that has worked with projects like Elrond and hosts several THORNodes.
- Next Ventures: Growth marketing fund for early-stage decentralized finance and fintech ventures.
Will Thorstarter Be Successful?
Thorstarter comes with a strong value proposition: allowing new projects to get funded with initial liquidity AND get connected cross-chain liquidity of major assets trading on THORChain.
But as mentioned in the introduction of this article, the crypto world has been swamped in new launchpad platforms recently, therefore Thorstarter needs to stay true to its original founding principles of only funding quality projects (and therefore acting as a kind of “approval seal” for crypto investors) as well as conducting truly fair launches that not just benefit whales and crypto influencers.
On top of that, we have yet to see if the XRUNE liquidity model will be successful and can provide competitive fees (e.g. compared to projects just launching on Sushiswap), respectively show that the advantages of cross-chain liquidity can offset those fees.
Lastly but probably most importantly the question will be if Thorstarter can attract 1–2 promising new projects per month in order to grow its community and ecosystem impact.
About Thorstarter
Thorstarter is a new IDO platform built on THORChain by long-term community members and RUNE investors. Thorstarter’s mission is to grow the THORChain ecosystem by supporting new high-quality projects in the launch phase via an improved IDO process.
More information:
- Thorstarter Twitter: https://twitter.com/thorstarter
- Thorstarter Telegram: https://t.me/thorstarter
- Thorstarter Discord: https://discord.gg/fPjbPxm37F
- Thorstarter Medium: https://blog.thorstarter.org/
- Thorstarter Lightpaper: https://www.thorstarter.org/thorstarter-lightpaper.pdf
About Qi Capital
Qi Capital is a group of like-minded and experienced individuals from around the globe, sharing two common objectives: providing insights about crypto and DeFi, and proactively working with ambitious teams on the future of decentralized finance. Our core principle is to promote and foster individual creativity, growing not only as a group but also as creative thinkers and builders. To learn more about us, check out our website www.qicapital.org and our “Qi Podcast” via www.buzzsprout.com/1729379/ or engage with us on Twitter: @QiCapital.
Disclaimer
Qi Capital is a strategic investor in Thorstarter. This statement is intended to disclose any conflict of interest and should not be misconstrued as a recommendation to purchase any token or participate in any farms. This content is for informational purposes only and you should not make decisions based solely on it. This is not investment advice. All market prices, data, and other information are not warranted as to completeness or accuracy, are based upon selected public market data, and reflect prevailing conditions and the author’s own views as of this date, all of which are accordingly subject to change without notice.
