Fundamentals Outcompete Price On THORChain

Despite the fact that Rune price has been sitting around 1$ (a 20x price drop from 20$ at the top of the last bull market) the core development team keeps tirelessly shipping new features and products. Contrary to the Rune price action, THORChain fundamentals and user traction have never been better imo.

Below I list some important metrics and notable developments as bullet points, in no particular order.

  • Organic Fees vs Block Rewards: THORChain nodes earn block rewards and swap fees. Despite the current market conditions, the share of organic swap fees in THORChain earnings has been consistently growing. Below we see that this time around last year organic fees were only <5% of the total earnings. The rest of the earnings were being subsidized by block rewards. As of this month this fees make up 44% of the earnings and are growing. THORChain is on right track to generating more fees than the block rewards it puts into circulation soon. This is an extremely rare find in DeFi and goes to shows how THORChain can become economically sustainable.

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  • Unique Swappers: The number of unique addresses performing swaps on THORChain has been growing. This month THORChain will probably see it’s highest ever swapper count with more than 66k unique swappers. While the marketing campaign enrolled this month plays a factor here we can see below that the growth since Nov 2022 has been consistent and is mostly organic.

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  • TrustWallet & Ledger Integrations: An important point that often gets missed is that THORChain’s customers are not end-users. It’s DEXs, bridges, wallets, aggregators who can permissionlessly become a THORChain affiliate. Basically any kind of front-end that already have users can take users’ cross-chain swap intents and settle them by routing through THORChain.

    There have been notable developments on this front recently. The biggest one is TrustWallet integration. Today, most of the volume on THORChain comes from TrustWallet. The upcoming one i’m keeping an eye on is the Ledger Live wallet integration.

     

  • Streaming Swaps: This one has just shipped today. I’m very curious to see how much new volume it will bring. The idea with streaming swaps is to break a swap into many swaps; the swap takes longer but executes at a much better price. Below we see the results in real action.

    Just by waiting an additional 10 mins for a swap to settle, the price can be improved by 17%, enabling THORChain to compete with CEXs in executing millions of USD worth of Bitcoin trades.

    (This feature is more nuanced than vanilla TWAPing. THORChain’s slip curve and THORsynths do the magic behind the scenes.)

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Leave your comment...

What about THOR's new competitors that weren't around to challenge it last bull cycle? Doesn't Layer 0's omni-coin standard directly compete on cross-chain swaps? There were two or three others, though I can't name them off the top of my head, (might even be a BTC coin standard that allows for cross chain assets). I had concluded that cross-chain infrastructure would eliminate THOR's use case in the long run. Maybe you see something I don't?

Swap X asset to stable -> bridge stable -> Swap stable to Y asset can always be regarded as a competitive alternative path to THORChain. This path will indeed become more efficient as CCTP (Circle's cross chain transfer protocol) adoption rises. CCTP will bridge USDC w/o fees, and w/o needing LPs. This may put existing bridge applications in existential crisis but not THORChain imo.

THORChain has fairly evolved as a DEX and has a large scope of services, main ones being

  • swaps
  • savings (single sided yield)
  • soon lending

Needless to mention Bitcoin angle where THORChain has no competition. (except smaller THORChain forks and similar projects like Zeta, Chainflip, Maya which are overall net positive imo; they validate the overall design while adding their flavors into it)

Really insightful post. This stat in particular jumped out to me when I read it:

"Below we see that this time around last year organic fees were only <5% of the total earnings. The rest of the earnings were being subsidized by block rewards. As of this month this fees make up 44% of the earnings and are growing."

Why do you think this isn't being talked about more? Is it because a lot of people discount the winners of prior cycles in favor of the shiny new thing? Judging by the way $RUNE has drastically underperformed this year it doesn't seem like this is garnering the attention it deserves (maybe I'm wrong)

your comment is spot on and to be very honest, I don't know why that's the case :)

Also the dev work for the BSC integration is complete so BSC will be added to Thorchain once there is enough space within the liquidity caps!