THORChain
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THORChain

Weekly Dev Update #82

THORChain Weekly Dev Update for Week 82, 15–21 Feb; Impermanent Loss Protection, Synthetic Assets, DOGE finished, Community Tool tweaks

Summary

The week saw continual bug fixes for multichain testnet, as well as two significant features added, Impermanent Loss Protection and the final design of Synthetic Assets.

Impermanent Loss Protection

This feature uses the assets in the Reserve to underwrite LP assets against Impermanent Loss on a sliding scale from 0->100% after 100 days. The following are intrinsic to this feature:

  • The reserve has enough RUNE assets to fund it, and the increase in economic activity on the network is high enough to cover the extra liability
  • The pools are of “high quality” and THORChain’s pool curation logic is not susceptible to enterprising RUNE holders wishing to game the feature.
  • LPs earn enough in the first 100 days to be “in the green” so that their need for IL protection is minimised.

Importantly, LPs are only insured against symmetrical deposits. If they add asymmetrically their deposit values are accounted for based on the slip on entry. This is the same logic as issuing them LP units for their pool ownership.

The bet is that with Impermanent Loss Protection, there should be no reason to withhold adding liquidity, or bail from a pool that is under water due to an unfavourable price change. In the long term this means higher TVL. With a higher TVL, fees and revenue from the system will grow to counter the increase in liability.

Notes: The team are still gathering data on Chaosnet, so the final figures (100 days etc) may be tweaked. In addition, the community should keep an eye on the draw down on the reserve and look for ways to capture income to ensure the reserve is always healthy.

Full spec: https://gitlab.com/thorchain/thornode/-/issues/794

Synthetic Assets

After several iterations, the team settled on a Synthetic Asset design that uses LP shares to provide collateral to synthetic assets, such that the synth is always back 50% by the asset, and 50% by RUNE. Synth liquidity units are minted when a user deposits capital in the pool, and the synth is minted to their address. The reverse occurs on redemption, with a pro-rate share of the units being burnt.

The keen-eyed DeFi economist will notice that when the synth is redeemed, the synth redeemer gets their true purchasing power avoiding any IL retained by the associated liquidity units. They are essentially offloading IL to other passive LPs in the pool. The same is true for any yield — the yield is not captured on redemption, even though the liquidity units might have a share in that. Thus Synthetic Assets should go hand-in-hand with Impermanent Loss Protection to prevent issues to passive LPs.

Synthetic Assets will be utilised in more advanced THORFi features, but the most relevant one would be for traders to arb pools at low cost and fast execution.

Synths will be live on MCCN, but more work required to build an interface around it. If you want to build a 100% synth trading web-app (no external chains), then reach out to get funded.

Full spec: https://gitlab.com/thorchain/thornode/-/issues/795

Multichain Resources

Midgard: https://testnet.midgard.thorchain.info

THORNode: https://testnet.thornode.thorchain.info

RPC: https://testnet.rpc.thorchain.info

Seed Service: https://testnet.seed.thorchain.info

THORNode

Multichain patches, including some updates to Ethereum decimal handling.

Midgard

Work continues to update Midgard V2 to handle Multichain requirements.

XChainJS

https://xchainjs.org

Pull Request List

Bridges

Actively-developed bridges will be reported here going forward. Bridges are commissioned once a team who can implement is identified and work begins.

Complete

  • Bitcoin: Deployed to testnet
  • Ethereum: Deployed to testnet
  • BitcoinCash: Deployed to testnet
  • Litecoin: Deployed to testnet

UTXO Chains

  • Dogecoin: Complete, will be activated after MCCN
  • ZCash: Scoped, rain-checked

Cryptonote

  • Haven: MSS complete, require some updates now to finalise integration
  • Monero: Pending Haven implementation

Custom

  • Cardano — Scoping
  • Polkadot: Ready for testnet demo.
  • Avalanche: Rain-checked
  • Zilliqa: Scoped, rain-checked

EVM Chains

  • Binance Smart Chain: Likely after MCCN
  • Ethereum Classic: Rain-checked
  • Rootstock: Rain-checked
  • Arbitrum: Rain-checked

IBC

Pending IBC integration — Cosmos, Terra, Kava, Secret Network, Injective Protocol, Sifchain, Akash Network

Clients

BEPSwap Client

Numerous UI/UX tweaks based on community feedback

ASGARDEX Client

Work continues to prepare the client for Multichain Chaosnet. V0.0.5 was released and is stable for BTC, BNB and THOR. Work continues on ETH, LTC and BCH.

Community Work

The following tools receive regular updates:

Telegram Bot

@thornode_testnet_bot

@thornode_chaosnet_bot

Twitter Bot

https://twitter.com/thor_bot

Delphi Defi Dashboard

Upcoming Release for the Dashboard

https://defi.delphidigital.io/thorchain/chaosnet/network

THORChain Network Explorer

Continual Improvements, now with custom sub-domains for each net:

https://thorchain.net/

https://testnet.thorchain.net/

https://multichain-testnet.thorchain.net/

THORChain Official Block Explorer

https://viewblock.io/thorchain

https://dash.viewblock.io/d/thorchain

RUNEData

View historical yield and simulate future yield in pools:

http://www.runedata.info/

RUNEBalance

View current arbitrage opportunities in the pools. New card-style overviews.

https://www.runebalance.com/#/pools

RUNEStake

RUNEStake can be used to see yield in THORChain liquidity pools.

https://runestake.info/

Trading Leaderboard

View the current leaderboard for traders on THORChain

https://leaderboard.thornode.org/

GrassRootsCrypto Youtube

GrassRootsCrypto consistently puts out great educational videos on THORChain, users should subscribe and bookmark the channel.

https://www.youtube.com/channel/UCuC_PiCEsNIT6HH88r7vCsw/videos

Next Milestones

Multichain support in asgard.exchange and the desktop wallet, continue to stabilise the chain. Help the community transition to Midgard V2. Anticipating chaosnet in 4–6 weeks.

Community

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

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A decentralised liquidity network.

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