THORChain’s decentralized model faces backlash – ‘The industry is watching’
THORChain faces growing scrutiny after Bitget hacker funds were reportedly routed through its cross-chain infrastructure.
THORChain saw a considerable spike in trading activity and fees between the 24th and 26th of September.
Meanwhile, its swap volume reached $1.72 billion by the 26th of September, up from $610 million in August.
At the same time, THORChain’s fees rose to $479,033.13 from $145,464.59. However, the news is not as good as it appears to be.
As the surge in on-chain activity happened after the recent Bitget security incident, wherein the stolen funds were reportedly laundered via THORChain to swap and transfer assets between blockchains.
Slamming the exchange, Bitget CEO Gracy Chen argued,
Our attacker addresses are publicly listed and actively tracked. We are formally asking @THORChain to refuse service to these addresses. Decentralization is a design principle, not a shield for facilitating known stolen funds. The industry is watching.
THORChain makes its case
THORChain’s response was based on the distinction between a permissionless blockchain protocol and a centralized exchange. For context, on a centralized exchange such as an ordinary crypto trading platform, the company can maintain a blacklist.
But THORChain does not operate in exactly that way.
THORChain is decentralized and permissionless like Bitcoin, Ethereum, and BNB Chain. What responsibility should Bitcoin, Ethereum, and BNB Chain bear when handling known stolen funds?
OKX founder stands in THORChain’s support
But Mingxing Xu, aka Star XU, OKX’s founder, is arguing that THORChain should not be compared directly with Bitcoin or Ethereum’s base-layer consensus.
Xu further explained that Bitcoin’s network does not have a group of people sitting together and deciding whether a Bitcoin transaction should be signed. Instead, it uses Threshold Signature Scheme (TSS) vaults.
The assets that are held within THORChain’s cross-chain infrastructure are controlled through a group of participating validators/nodes. Therefore, a transaction involving those assets requires a threshold of those participants to provide signatures.
Hence, he said,
Bitcoin cannot be stopped. THORChain can—it simply chooses when to do so.
Anndy Lian, an all-rounded business strategist in Asia, added,
Blaming @THORChain and saying they are not helpful and decentralized will not solve the problems.
RUNE’s price action and more
Despite these criticisms, THORChain’s native token RUNE stood strong, trading at $0.7908 at press time after a hike of 15.8% in the past 24 hours.
As of now, withdrawals remain suspended as Bitget investigates the breach and works with law enforcement and blockchain-security firms.
Final Summary
- BitGet’s CEO, OKX founder, and many in the crypto industry are slamming THORChain’s decentralized nature.
- But in reality, THORChain is different because it uses Threshold Signature Scheme (TSS) vaults.
