I don’t know how big cross-chain swaps will actually be, but I can see a world in which each Thornode costs over $1B in collateral

2.5M per node (dev’s upper estimate) at $400/$RUNE.

This would mean @thorchain_org has a $200B FD market cap, which isn’t crazy in bull scenario

Lets look only at fees earned from the DEX and ignore all other earnings Thorchain is likely to make from other cross chain DeFi. Say it trades at 50x cash flow and average fee is 0.12% (roughly where it is today)

To get to a $200B network valuation, then the DEX would need to do ~$3.3T in volume per year or about $9.25B per day.

This is very doable

According to Gecko, Binance is already doing $15B in volume per day in volume; CB Pro does $2.3B https://www.coingecko.com/en/exchanges/binance

The biggest for us to this analysis is that rates are unlikely to be able to stay at 0.12%. As crypto goes increasingly main stream inside of TradFi, CEX rates will likely fall another 100x

However, because Thorchain is non-custodial and more private, I suspect that it has significantly more pricing power than CEX. Maybe Thorchain’s rates will need to drop ~10x to 0.01% to stay competitive

But it’s also worth noting that volumes across all of crypto are likely going to go up at least 1000x.

If the NYSE is doing $400B in volume per day just trading equities, I strongly suspect that there will be at least 10x more activity in crypto tokens as crypto matures. Multiple tokens are often need to be used to make a single financial transaction.

The real outstanding question is how much volume will Thorchain attract. Early signals are good based on its Bepswap results and the cross-chain demand seen by Ren

I’d say another risk to the valuation and overall defensibility of Thorchain is going to be how many assets it can support.

While the ~100 asset cap should expand over time, it won’t be able to move as quickly as CEXs or maybe not as fast as other DEXs

On the DEX side, it seems that the biggest risk is that a SushiSwap + Ren solution would be equally sufficient for traders wanting native assets.

If every chain has its own Ren-style bridge to Ethereum, which it will, then Ethereum will become the black hole for assets, not Thorchain

I have serious problems w the sustainability of Ren w their current tokenomic structure, but Ren-style bridges + Ethereum AMMs are the biggest risk to Thorchain over the next 5 years