The THORChain project was founded in 2018 under the premise that using centralized exchanges to transfer crypto-assets between different blockchains was flawed. Non-custodial exchanges, otherwise known as decentralized exchanges (DEXs), were the long-term solution.
THORChain TSS is a practical distributed threshold signature protocol based on the scheme proposed by Gennaro-Goldfeder in 2018. THORChain TSS is a robust, secured, and leaderless signature scheme that allows several signers to be involved in signing on a given message.
End-to-End encryption ensures the security of the communication, and reliable broadcast reduces the risk of a single point of failure.
The blame scheme is introduced to punish the nodes which do not comply with the protocol. The attacker has a low motivation to attack the network as they face a high risk of losing their bond.
The THORChain network can facilitate the permissionless exchange of digital assets at fair market prices, resistant to attack.
The web is serviced by a group of anonymous nodes who bond a certain amount of the network’s support and are continuously churned to ensure liveness and prevent capture.
The nodes must participate in continuous key-generation ceremonies to create vaults with a virtual private key. They then monitor these vaults on external networks such as Bitcoin and Ethereum and make witness transactions into a replicated state machine when inbound transactions are observed.
The state machine comes to a consensus on these observations and applies exchange logic to them. Outgoing transactions are then delegated to smaller signing committees for expedited processing, which participate in multi-party computation to sign the transactions and broadcast them back to the correct network.
The network is optimal when 2/3rds of the native network asset is bonded and 1/3rd is staked.
At that point, all assets can be underwritten. Protocol incentives aim to drive this behavior. The network is governance-minimal, letting staked capital drive network direction.