Secured Assets

Q: What are Secured Assets? Secured Assets are a novel answer to the problems of cross-chain interoperability, providing an open source, decentralized, and secure cross-chain asset model powered by THORChain. Secured Assets are backed 1:1 by native assets secured in THORChain’s decentralized vaults, which are secured by Threshold Signature Schemes (TSS) with the private keys split among 100+ decentralized node operators that churn every 3 days. Secured Assets remove all dependency to third-party bridges (e.g. Axellar, Gravity) and wrapping by centralized intermediaries (e.g. wBTC by BitGo, cbBTC by Coinbase), enabling access to DeFi with native assets from all connected chains.

Q: How Secured Assets differ from traditional Bridged Assets? Answer: Bridged assets are IOUs issued by a third-party protocol on the destination chain, and represent a claim on the underlying asset on its native chain. In the best case, the assets on the native chains are secured by an external validator set (e.g. Axellar, Gravity), and in many cases by low-security multisig that have resulted in billions of dollar lost in hacks (Ronin Bridge $625m hack, Wormhole Bridge $326m hack, Nomad Bridge $190m hack, and the list goes on). In any case, they introduce an extra layer of exogenous risk between the native chain and the end user. Secured Assets, on the other hand, eliminate this additional layer of risk. While they do indeed mint new assets on THORChain, THORChain’s TSS eliminates the external risks associated with third-party bridges and their security designs. This provides a far more robust architecture for Secured Assets than traditional bridges.

Q: How Secured Assets differ from Wrapped Assets? Answer: Wrapped assets are also IOUs, but, unlike bridged assets, these are issued by a centralized intermediary, one that holds the underlying asset in custody (e.g., wBTC issued by BitGo or cbBTC issued by Coinbase). This allows assets like BTC to be used in DeFi on e.g. Ethereum, but it forces users to trust the centralized issuer to secure the underlying assets appropriately, to not misuses the reserves, and to not give in to censorship (e.g. freezing assets under the pressure of arbitrary governments). In using wrapped assets, a centralized intermediary have now become one’s unintended financial partners, negating the very ethos of decentralization. In contrast, Secured Assets require no error-prone and corruptible centralized custodian, and are never subject to permission or KYC requirements.

Q: How are Secured Assets minted and redeemed? They are minted when native assets are deposited into THORChain’s vaults and can be redeemed 1:1 for those same assets at any time.

Q: Are Secured Assets backed 1:1 by native tokens? Yes, every Secured Asset is fully backed and redeemable for its native token.

Q: Can I transfer Secured Assets between chains? Secured Assets are currently only tradeable on THORChain via Rujira.