The Thor video codec is being developed by Cisco with the intention to use only royalty-free coding tools. The video codec is based on the well-known block-based hybrid video coding approach, but with some significant changes compared to existing standards such as AVC/H.264 and HEVC/H.265. These changes include transform coefficient coding, deblocking filter, a separate deringing filter, and interpolated reference frames. Experimental results show 14.5% and 15.3% BDR loss compared to the HEVC/H.265 reference software for low-delay and high-delay configurations respectively. When compared to optimized software implementations of VP9 and x265, Thor provides similar or better compression performance for the same frame rate.