THORChain Q2 2024 Ecosystem Report
1 April 2024–30 June 2024
Q3’23 Report | Q4’23 Report | Q1’24 Report
Summary
THORChain continues to provide a secure venue for DeFi services including swaps, savers, and lending. The network processed almost $14 billion in total swap volume, in large part by its largest integrators including Trust Wallet, THORSwap, THORWallet, ShapeShift, and Asgardex. New interfaces including Li.Fi and Cake Wallet have added support for THORChain swaps. Trade Assets were delivered — bringing a better swap experience to arbs and high frequency traders. The EVM Contract whitelist has been removed, making swaps accessible to smart contracts and smart contract wallets. Fee logic has been tweaked to make outbound gas fees cheaper than ever. Developers continued to focus on stability and hardening the core infrastructure to prepare for future demand. Various architecture changes were made to make the system more secure and scalable.
A look at Q2`24 network statistics
Dashboard | More Stats | Even More Stats
- Total USD Volume: $13.9b
- Highest 24h Volume: $334.7m
- Change in Total Liquidity: $503.97 to $259.74m (-51%)
- Change in Savers: $134.55m to $94.04m (-30%)
- Liquidity Fees Collected: $5.28m
- Affiliate Earnings: $3.92m
- LP Earnings Breakdown: 27.83% Liquidity Fees — 72.17% Block Rewards
Top 5 Swap Routes by USD Volume
- BTC <> RUNE — $2,492,001,409
- ETH <> RUNE — $1,583,489,240
- BTC <> ETH — $1,496,248,560
- USDT <> RUNE — $1,053,360,752
- BTC <> USDT — $965,727,269
Top 5 Swap Routes by Liquidity Fees (USD)
- BTC <> RUNE — $905,618
- BTC <> ETH — $576,651
- ETH <> RUNE — $505,224
- USDT <> RUNE — $424,753
- BTC <> USDT — $316,308
Top Affiliate THORNames by USD volume
- “t” — $634,854,733 in 11,257 swaps
- “ti” — $ 500,598,654 in 67,207 swaps
- “wr” — $211,773,026 in 3,861 swaps
- “ss” — $201,423,556 in 3,925 swaps
- “dx” — $158,906,187 in 5,906 swaps
- “td” — $129,082,321 in 56,138 swaps
- “xdf” — $20,434,715 in 784 swaps
- “tr” — $19,686,491 in 1,596 swaps
- “te” — $17,476,535 in 1,513 swaps
- “ds” — $16,565,032 in 287 swaps
- “rg” — $16,372,907 in 5,623 swaps
- “oky” — $13,962,247 in 621 swaps
- “lends” — $12,895,720 in 477 swaps
New Integrations
- Li.Fi (Swaps)
- Cake Wallet (Swaps)
- Zengo (Swaps)
- Ethos Wallet (Swaps)
- Houdini Swap (Swaps)
- Vultisig (Swaps, MPC RUNE Wallet)
- Fireblocks (MPC RUNE Wallet)
- Coinbot Forge (THORName Marketplace)
What’s new to THORChain in Q2 2024?
Trade Assets
GitLab | Medium Article | Video
Trade Accounts are a new primitive built for frequent traders and arbitrageurs. Trade Accounts are assets native to THORChain that hold the price of the corresponding native asset. These assets are held 1:1 within THORChain’s vaults, but outside of the liquidity pools.
Trade assets are twice as capital efficient as Synthetic Assets, meaning that it takes half as much capital to arb the pools with Trade Assets as it does with Synths. There are no slip fees when entering or exiting Trade Assets, so they can be redeemed to their native counterparts for only the cost of gas fees.
Since the release of Trade Assets, a majority of arbitrage agents on the network have switched from Synthetic Assets, which now dominate the usage for high frequency traders.
Router Contract Whitelist Removal
Previously, contracts had to be whitelisted to interact with the Router on EVM chains as a security measure. Following an audit with Code4rena looking at smart contract parsing logic, particularly risks around allowing un-whitelisted contracts to interact with the THORChain Router, the whitelist check has been removed for inbound swaps. This allows smart contracts to directly call the router, opening up additional opportunities for SwapIn aggregation, and the ability for Smart Contract Wallets to interact directly with THORChain.
Lending Affiliates
Interfaces can specify an affiliate fee which is collected when originating a loan. This allows frontends to monetize loan creation on THORChain.
Simulation Tests
A new testing framework has been created which simulates activity on external chains as well as the state of THORChain itself. THORChain’s state is altered by actions on external chains, so this new testing approach will deprecate smoke tests in favor of a more maintainable and extensible testing suite.
Manual Observation Tooling
Tooling has been added for node operators to manually observe transactions on external chains. This tool will simplify the process for node operators to issue refunds to users for non-observed transactions, or if other issues arise.
Per-Asset Dynamic Outbound Fees
Previously, THORChain set the outbound fees based on a multiplier determined by whether the system as a whole was at a deficit or a surplus of gas fees paid when compared to gas fees collected from users. This change sets the multiplier given to outbound fees on a per-asset basis, meaning that different assets will have different outbound fee multipliers which more accurately reflect the amount that assets cost to send onchain. This greatly decreases the outbound cost of BTC and ETH swaps.
Architecture Design Record (ADR) Updates:
ADR-13: Synth Backstop
Status: Passed, awaiting implementation
Summary: Implement a system that ejects savers when synth utilization grows beyond a target amount (50% of the pool depth). Savers are ejected on a last-in-first-out basis.
ADR-14: Savers Yield Scaling to Match POL Target
Status: Implemented
Summary: Reduce the maximum synth utilization at which Savers receive yield from 60% of the pool depth to 50% of the pool depth. This new setting matches the synth utilization at which POL will add liquidity to the pools.
ADR-15: BNB Synth Refunds
Status: Passed, awaiting implementation
Summary: Refund BNB Beacon Chain synth holders who were not refunded during the Ragnarok.
ADR-16: Affiliate Revenue Share
Status: Vote in progress
Summary: Create a new constant that allows swaps with an affiliate fee to pay more liquidity fees as dictated by mimir. The proposed setting will add an additional liquidity fee at 12% of the fee the affiliate collects.
ADR-17: Burn System Income
Status: Vote in progress
Summary: Create a new constant that will burn a % of the total system income. The proposed value will burn 1bps (1/10000) of the system’s income.
In The Pipeline — What To Expect In the Future
A number of new features are being worked on by developers. These features will improve upon the scalability, security, and UX of THORChain. Several features will require governance to signal consensus from nodes before being developed.
RUNEPool
RUNE Pool is an upcoming liquidity product scheduled for release in Q3 2024. This feature will enable users to participate in Protocol-Owned Liquidity (POL), allowing them to own a share of liquidity across all POL-enabled pools rather than just a single pool. By distributing liquidity in this way, RUNE Pool aims to reduce impermanent loss and stabilize yields around the average LP yield on the network.
RUNE Pool offers a straightforward way for users to engage with the incentive pendulum and earn yield on their RUNE by participating in the network. This new product is expected to significantly boost the total value locked (TVL) within the network and enhance the liquidity of the RUNE asset.
Additionally, the behavior of Protocol-Owned Liquidity will be updated to match Savers’ deposits when they enter the Savers Vaults. This adjustment will allow POL deposits to scale with Layer 1 (L1) demand, enabling RUNE Pool to grow responsively in line with L1 Savers demand.
An important benefit of RUNE Pool is that it helps de-risk the reserve by offloading the liquidity risk from the protocol to individual poolers. By distributing this risk, the protocol’s overall exposure is reduced.
Limit Orders (Orderbooks)
Limit orders on THORChain will allow users to place orders that will automatically execute with the AMM as the counterparty once a certain price target is reached. This is not a traditional Central Limit Order Book (CLOB) where orders are executed against other orders and takers, but is a hybrid with the AMM design. Limit Orders will be built using Trade Assets as a primitive.
Solana and EdDSA Chain Support
Work has begun to add support for Edwards-curve Digital Signature Algorithm (EdDSA) with TSS as it currently supports Elliptic Curve Digital Signature Algorithm (ECDSA). This work will pave the way for Solana support later this year and then other chains that use EdDSA like TON.
Ethereum Router V5
Upgrades to the Ethereum Router for transferOutAndCall, as well as adding support for Batched Outbounds.
Hard Fork
A hard fork enables upgrades of key dependencies that cannot be upgraded during normal software updates. This includes:
- Taproot address support (bc1p)
- Cosmos version update
- Removing archived code
IBC DEX Aggregation
Allow THORChain to aggregate IBC routes through the ATOM (GAIA) pool. THORChain will accept memos and transfers from an IBC module and also allow ATOM to be broadcasted to an IBC module to swap out to other chains and DEXs. This will allow THORChain to have access to liquidity to every asset connected to IBC.
Memoless Transactions
Memoless transactions have moved down in priority, but are still considered an important feature for THORChain’s future.
Memoless transactions will be a new way to “register” a memo before a transaction is made, so that a swap or any other action can be done without sending a memo in the actual transaction itself.
This will enable a new kind of swap interface where a user does not need to connect a specific wallet before swapping. The wallet interface can be completely abstracted away from the swap process. A user can register their transaction intent on an interface, the interface can register the memo on behalf of the user, and then the user can simply send the exact amount specified to the inbound vault address and execute their swap on any wallet. QR codes can also be used to simplify this process and make it extremely accessible to swap with any wallet, even if that wallet has no relationship with THORChain frontends.
THORNames Marketplace Functionality
Create functionality to list, sell, and bid on THORNames in a native way. This will create additional utility for the THOR Name Service (TNS).
Other features in design / discussion:
There are other features and proposals that are lower priority than above that are being considered by the developers. There is no guarantee these features will eventually make it to the network.
- Instant Swaps (let users bypass the outbound queue for very fast swaps with no delay)
- Peer2Pool Lending with Trade Assets — GitLab Design
- Batched Outbounds — GitLab Design — send multiple outbounds at once rather than each individually to save gas fees for users. Priority low since there is no throughput issues currently and it touches the most sensititve areas of the codebase (signing logic)
- Cold Vaults — GitLab Design — Currently on pause due to the network priority being liquidity, not security. Could be revisted if additional security is needed.
Where to get more information about THORChain?
- Twitter Spaces — held most weeks, subscribe on RSS or wherever you get your podcasts
- THORChain University — educational content, monthly posts, & discord server
- THORChain University Updates — monthly update articles
- GrassRoots Crypto — update videos
Community
To keep up to date, please monitor community channels, particularly Telegram and Twitter:
Website | Documentation | X | Telegram Community | Telegram Alerts | Community Discord | Developer Discord | Explorer | RuneScan | Reddit | Gitlab | Medium | Linktree | Thorcharts
