Does Torn's price affect the future of Tornado Cash?

I have been following Tornado Cash for a long time, both the project itself and its token. There is no doubt that Tornado Cash is a groundbreaking project that has achieved a great deal and the team and community members are working on the future of Tornado Cash. However, the recent negative market has made me think about the economic model of Tornado Cash.
As we all know, the basic condition for the normal operation of Tornado Cash is that there is sufficient capital in the pool. In other words, the greater the number of tokens in the pool and the wider the source, the better the privacy will be, it will be more widely accepted for the user who really need tornado cash, not short-term speculator. However, the number of users who are in need is only a small minority and most of those who use Tornado Cash are speculators in the market. This brings about a problem: the funds in the pool will be affected by the price of torn. If the price keeps falling in the future, the funds in the pool will flee in large numbers. Some people may argue with me, but the following statistics prove my point.
Figure 1 shows the changes of deposit and withdraw from the pool on a weekly basis. Figure 2 shows the weekly price fluctuation of Torn. As shown in the figure, the price of Torn was 80U when it was put on the cover, which quickly rose to about 450U a week later. At the same time, a large amount of funds poured into the pool, which greatly improved the safety of Tornado Cash. However, with the rapid decline of the price of Torn, the growth rate of deposits decreased sharply, and even the net outflow of funds in the pool began. It can be seen that even if the current price of Torn is stable at about 100U, the fund of the mixed currency pool is still flowing out. These data show that the price of Torn will have a substantial impact on the funds in the pool.
Figure1


Figure2

At present, the funds in the pool are still stable. Even if some funds start to be not optimistic about the future of the price of Torn. However, when the price continues to fall, will the funds again flee in large numbers. Moreover, it is TVL that speculators are bullish on Tornado Cash that continues to buy Torn. When the growth rate of TVL drops or even stops growing, it may lead to the collapse of Torn and further promote the withdrawal of a large number of funds from the pool. Pessimistically, this is a negative feedback that will destroy Tornado Cash when Torn prices fall. In the longer term, will there be enough capital to keep Tornado Cash going in a bear market? Moreover, after the 10%torn is fully distributed one year later, the incentive for speculators to deposit their funds in Tornado Cash may be greatly reduced. These issues are key to Tornado Cash. I think it’s worth thinking about.

11 Likes

Of course!When there is no return on investment value, people will stop owning the band, such as withdrawing from TVL, stopping LP mining, and selling the.

1 Like

A high TORN market cap means higher security against a 51% POS attack; this can be achieved either by increasing TORN price or its circulating supply.

1 Like

Tornado pools were doing fine even before the existence of TORN token, so the price fluctuations are no big deal.

5 Likes

So what’s the token’s meaning for the project?I just feel a little confused. Has the token slown down the development of Tornado Cash?
Besides, is it possible to add DECP or other countries’ digital cash into the pool? Maybe it will lead to an revolution for Tornado Cash.

3 Likes

I think this is not the right attitude. Since the token Torn has been issued, we should work hard to integrate the token into the Tornadocash ecosystem and let them thrive together. If the token itself has no impact on the project, why would we need it? Personally I stay positive for $torn since it’ll be given more utilities as V2 comes.

4 Likes

I think it was fine because they know they will get $torn
if the project claimed there will be no token reward , it wont become this big. every blockchain project needs a token economic to grow . it shouldnt be ignored.

3 Likes

Use your mind before speaking.Investors choose you because they believe that what you do is meaningful. Your remarks hurt us again and again.Please remember that the reason we invest is all because of your team.
Please protect the price

2 Likes

“the reason we invest is all because of your team.
Please protect the price”

Sorry, I do not want to misunderstand: do you mean
“the reason we invest is all because of price.
Please protect the price”

or

“the reason we invest is all because of your team.
Please protect the team”

:wink:

2 Likes

Your understanding is biased, let me tell you more straightforwardly. The reason for investing is to believe in the team and think that what the team is doing is awesome. But in the world of cryptocurrency, the market value of a project will be very important. It may bring more users, and investors may become users. More importantly, it will also bring you reputation and wealth. Your token will eventually be unlocked. At that time, do you still hope it is worthless? If you are very optimistic about a company and have invested in stocks, then the company will say “the price fluctuations are no big deal” to make you lose your fortune. Can you calmly talk about “Please protect the team”? Please remember that we are value investing, not investment junk, so we choose tornado.cash. You have no responsibility to consider for investors, but please don’t hurt investors who believe that tornado.cash is a great project

4 Likes

I understand better what you mean - I was just joking earlier.

I wanted to highlight that the price action of the token is worrying many people, and as was said earlier - the project works fine even without the monetary incentive.

Take care

1 Like

the project works fine because of the expectation of token reward,
I dont think anyone will willing to put eth in a place with no reward for so long and having a risk of being banned with exchanges.

2 Likes

The thing is that TC was being used by people even before the token reward: ie. it works fine independently of the price of TORN.

2 Likes

What is the reason for the TORN price drop today ?

1 Like

Due to the nature of anonymity mining, it absolutely effects the anonymity in any given set, if the incentives do not meet a passive turnover farmers will look elsewhere. This doesn’t mean that anonymity will become inadequate from so, just become less efficient than it was before. As other community members have stated, the protocol worked seamlessly without a token. So I believe the fundamental privacy will remain strong regardless of market conditions.

3 Likes

TC is one of the very few protocols with an actual use which goes beyond the usual “I put x in to get x+y out”.
Current price downtrend is nothing to blame on the devs as there is a major correction going on in crypto, most importantly ethereum which has halved from its ATH in a matter of few weeks.
The point of TORN is to establish decentralized governance and it is intended for voting on protocol changes; we are now in the process of establishing a multisig which once up and running will boost community participation. The next step will probably be a discussion on sustainable avenues for protocol fees being distributed to TORN holders, which price-wise will be the game changer. I personally support this in principle, but first things first.

2 Likes

Tornando was “working fine” if “working fine” means that it has a severe lack of TLV. Economic incentives properly engineered is the power of ethereum. TORN is currently being used to incentive people to deposit into tornando, thus increasing the protocols utility and value to its users. Once those incentives dry up tornado will go back to its paltry TLV numbers. This is not good imo. I can tell you I have been an early user & supporter of TORN. Prior to the TORN mining program, I literally used the protocol like 2 times, since then Ive used it far more. I cant imagine Ill continue to use it like this without incentives. It an obvious and predictable result and the community appears to be ignoring it.

3 Likes

Guys, it’s been less that 6 months since the token is available. As a UNI holder, trust me : wait.

1 Like

Another aspect to keep in mind is that cryptotwitter is VERY price obsessed. If torn price stays low, so will stay tornado cash popularity. The question is > do we want tornado cash to be popular or to stay low key?

1 Like

For once a project is serious. Let’s be patient, the token price will rise itself with time. TC is one of the most active project on the market.

1 Like