Savers Vaults on THORChain

Deposit BTC, Earn BTC. Earn yield on your Layer 1 assets. THORChain Savers Vaults allow users to earn yield on native assets permissionless-ly without price exposure to any other asset. Earn BTC, ETH, BNB, DOGE, ATOM, AVAX, and more.

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THORChain

7 min readNov 15, 2022

At a time when many centralized options have come under stress, THORChain now offers a permissionless, open-source, decentralized self-custody solution that enables users to earn in-kind yield on native assets without any price exposure to RUNE. Thus, a user can use their self-custody wallet to earn Bitcoin on their Bitcoin.

This is a major milestone as THORChain now offers a service previously only available in centralized finance (CeFi) without all of the inherent risks.

Savers Vaults are a pivotal innovation for THORChain and the first decentralized product to offer yield on native Bitcoin, and many other native assets. Users anywhere in the world can enter and exit THORChain Savers Vaults at will and earn yield without the need for wrapping, impermanent loss risk, or price exposure to multiple assets.

Savers Vaults are now available for every Layer 1 asset on THORChain: BTC, ETH, BNB, BCH, DOGE, LTC, ATOM, and AVAX.

Analytics are available on thorchain.net

What is a Savers Vault?

Savers Vaults are a new way to supply single-asset liquidity on THORChain. Any user can simply deposit native Bitcoin, earn in-kind yield, and withdraw their principal any time since they maintain full control of their keys.

How do Savers Vaults generate yield?

Liquidity pools on THORChain generate yield from swap fees and block rewards. As traders swap assets using THORChain, fees are paid to liquidity providers. Savers will earn approximately half of the yield that a typical RUNE-ASSET liquidity provider would earn over the same time period.

Is Savers Vault yield fixed rate or variable rate?

Yield is variable and driven by swap fees, block rewards, pool depth, and the incentive pendulum. Annual percentage rates (APRs) are calculated using an extrapolation of past performance data from the last 30 days. Past performance does not guarantee or predict future results.

Are there fees to enter and exit a Savers Vault?

There are slippage fees paid on entering and exiting a Savers Vault. Slippage fees increase with deposit size relative to total pool depth. Smaller deposits and withdrawals will incur less slippage upon entry and exit, as will splitting up large transactions into smaller ones. Users should carefully consider their deposit and withdrawal size before taking any action — fees charged are final as soon as the transaction is made.

Which assets are eligible to deposit in a Savers Vault?

All Layer 1 assets on THORChain including:

Bitcoin (BTC)
Ether (ETH)
Binance (BNB)
Litecoin (LTC)
Bitcoin Cash (BCH)
Dogecoin (DOGE)
Cosmos Hub (ATOM)
Avalanche (AVAX)
The primary gas asset of any future blockchain supported by THORChain

Where can I access Savers Vaults?

Users can manage a THORChain Savers Vault positions through any supported frontend including:

THORSwap Earn
XDefi Web
THORWallet (Mobile)
Lends
Edge Wallet (Mobile)
ShapeShift
AsgardEx
Additional interfaces will be added as they are created

Where can I track my Savers Vault yield?

Users can track their Savers Vault positions on any supported interface including:

THORYield
THOR Infobot
Additional interfaces will be added as they are created

Should I use THORChain Savers Vaults?

Savers Vaults were created for long-term depositors. You should use THORChain Savings only if you are planning on keeping your funds in the vault long enough for the fees accrued to offset the entry/exit costs, as well as the outbound fee(s) assessed when withdrawing.

Example: a user deposits 1 BTC in a pool 1000 BTC deep; thus pays a 0.1% slippage fee (1/1001) and is credited 0.999 BTC in the vault. If the pool is paying 3.65% APR, this is 0.1% earned every 10 days. Thus the user should plan to stay at least 20 days to pay for the entry and exit fee as a minimum. If the user does not stay long enough, they risk having the yield they earn not offsetting the fees paid to enter and exit the vault, thus causing them to experience a loss of principal.

How does THORChain secure assets on other blockchains in a decentralized way?

Deposited assets are secure in THORChain’s liquidity pools. THORChain utilizes several mechanisms to secure its liquidity. As a network, THORChain is composed of ~100 anonymous nodes — each of which bond RUNE to validate blocks and earn rewards on THORChain. There are 5 Asgard Vaults — each of which is controlled by 20 randomly selected nodes via Threshold Signature Schemes (TSS). There is no person, group, or entity that can unilaterally control user funds on THORChain. In the event of a loss of funds, node bonds are slashed to recoup all losses due to all vaults always being overcollateralized. The solvency of THORChain’s vaults can always be verified on-chain.

Transparency is the default. All user funds are always solvent, accessible, and verifiable on-chain.

What are the risks associated with Savers Vaults?

Savers Vaults are not risk-free. Although Savers has been designed to mitigate risk, the possibility of loss cannot be eliminated completely. It is the user’s responsibility to be aware of the risks before entering a Savers Vault. THORChain has numerous security features as well as a dedicated THORSec team to protect the network against malicious actors.

Risk: Temporary Chain Halt

Explanation: THORChain can automatically halt trading for blockchains individually or collectively as a protection if an issue is detected such as the automatic solvency checker, significant block lag on majority of validator nodes due to individual chain issues, consensus failure, etc.
Impact: Low
Likelihood: High
Mitigation: Withdrawals may be temporarily halted, but funds are unaffected. For security, funds cannot be moved while a chain is paused. Withdrawals will be re-enabled when trading is resumed after a node vote.

Risk: Slip-Based Fee Upon Entry and Exit

Explanation: Users are charged a slip-based fee upon entering a Savers Vault which decreases the redeemable position of a user depositing/withdrawing.
Impact: Low
Likelihood: High
Mitigation: Interfaces must be transparent and accurate in their communication to users. Interfaces should encourage users to deposit and withdraw funds in small amounts — this can be easily automated — to reduce slippage and maximize the amount that can eventually be withdrawn by users. Quote endpoints have been developed as a source of truth for interfaces.

Risk: Severe Drawdown of ASSET Depth in THORChain Pools

Explanation: It is possible for Savers to pay higher exit fees than entry fees if the ASSET (BTC, ETH, etc.) depths are significantly lower than when the user entered, since their slippage will be higher on exit.
Impact: Medium
Likelihood: Low
Mitigation: Traditional RUNE-ASSET liquidity providers underwrite the synthetic asset liability of the pools. To ensure safety, Protocol Owned Liquidity will be implemented. As Savers grow, the THORChain protocol itself will become a liquidity provider on the network, owning a portion of the pools as an LP of last resort to prevent a significant loss of ASSET depth.

Risk: Network Loss of Funds

Explanation: Loss of funds from the network due to an exploit will impact Savers.
Impact: High
Likelihood: Low
Mitigation: THORChain has a formal bug bounty program to protect users. A number of security features have been developed in conjunction with a dedicated on-call security team, THORSec, to make the network more resilient and responsive to attack. In addition, the network has automatic solvency-checkers, a delayed transaction outbound queue, and any node that can spot nefarious behavior can pause the queue for up to one hour.

Can my Wallet / DEX / DeFi Product / Yield Aggregator / App offer Savers Vaults to its customers?

Yes, any person, service, or dApp can create a frontend interface to offer THORChain Savers Vaults to its users. Interested parties should review the THORChain Developer Documentation and contact Nine Realms. xChainJS will offer addSavers and withdrawSavers functions in the next thorchain-amm package update. Interfaces are responsible for properly communicating risks and fees to their users.

Resources on Savers Vaults:

How do I manually enter a Savers Vault with any wallet? (Advanced Users Only)

Entering a Savers Vault can be done using any wallet. If done incorrectly, it can lead to an irreversible loss of funds. Do not attempt unless you know what you are doing.

To Enter: (Guide)

Review the documentation
Query THORChain Inbound Addresses for ```address``` on desired chain
Query a second independent source for Inbound Addresses
Send a transaction with desired deposit amount
THORChain receives and processes your deposit

To Exit:

Review the documentation, noting the “dust_threshold” for desired chain
Query THORChain Inbound Addresses for “address” on desired chain
Query a second independent source for Inbound Addresses
Send a transaction with the amount as the desired withdrawal percentage (1–10,000 bps) + dust_threshold in `1e8` format
THORChain receives and processes your withdrawal

THORChain Community

To keep up to date with THORChain, please monitor community channels, particularly Telegram, Discord, and Twitter: