THORSwap

Market Making

THORSwap is a multi-chain exchange that allows users to swap native assets across blockchains by utilizing the THORChain network.

Risk Rating
Watch Out
Protocol Code Quality
Protocol Maturity
Protocol Design
Summary
What we like
THORSwap provides seamless cross-chain swaps without a centralized counterparty and without the need to rely on bridging or wrapped assets.
What we like less
To support native Layer-1 (L1) integrations, THORSwap is built on the THORChain network which has suffered several attacks in the past.
What it means for you
Offers you support for cross-chain swaps between 25+ crypto assets across 8 major L1 blockchains with low slippage and deep liquidity pools, impermanent loss protection, and unique tokenomics.
Information
Info
  • Website
  • Token: RUNE
  • Tags: Market Making
Key Metrics
  • TVL: $366.8M (Rank #40)
  • TVL Ranking by Market Making: #0
  • Blockchain: Thorchain, Bitcoin, Ethereum, Bitcoincash, Avalanche, Doge, Litecoin, Cosmos, Binance
  • Chain TVL
    • Thorchain: $187.58M
    • Bitcoin: $75.28M
    • Ethereum: $74.6M
    • Bitcoincash: $9.99M
    • Avalanche: $7.19M
    • Others: $12.15M
Risk Assessment
Watch Out
Protocol Code Quality
Protocol Maturity
  • Core protocol launched in 2021; maturity over one year minimizes technical risk as smart contracts are well battle-tested
  • Top 10% by total value locked reduces risk
  • Multisig wallet controls protocol upgrades
  • Multisig consists of less than 4 signers, which makes the protocol more susceptible to centralization risks
  • No timelock exists or no information documented, which mean a malicious actor could approve upgrades without any delay
  • At least one critical governance issue documented
  • Low voting power concentration reduces risk
Protocol Design
  • No death spiral concerns
  • Externally verified bridge system that is reliant on an external set of validators who have to post collateral that gets slashed in case of malicious activities; the slashed collateral is used to reimburse user funds if stolen due to malicious actions
  • Bridge messages are validated by an external third-party that usually comprises a limited multisig
Things to know about THORSwap

How THORSwap (THORChain) works

THORSwap is a cross-chain decentralized exchange (DEX) aggregator built on top of the THORChain liquidity network. THORSwap is independent of THORChain but highly complementary as it accesses liquidity for more than 25 crypto assets across major L1 blockchains through THORChain. THORChain is a decentralized cross-chain liquidity protocol that also serves as its own L1 blockchain. THORChain leverages the automated market maker (AMM) model to attract liquidity from users in return for trading fees and rewards. Most AMMs suffer from impermanent loss and are developed on top of existing L1 infrastructure which means the DEX cannot swap assets between chains without using a bridge. THORChain does not have these limitations as it offers liquidity providers (LPs) impermanent loss protection and can interact across chains using THORNodes. LPs receive linear impermanent loss protection over 100 days, which means 1% incremental protection every day until full coverage. THORChain operates a node for its own blockchain, as well as a node for each supported asset (i.e. Bitcoin node, Ethereum node). These node act as vaults that validate and agree that an asset has been received on one end, before a corresponding vault approves an outbound transaction equivalent to the amount deposited. It does not peg or wrap assets, but rather only determines how to move them in response to user actions. THORChain observes incoming user deposits to vaults, executes swaps, and processes outbound transactions. THORSwap benefits from all the above but also offers additional functionality beyond THORChain. It provides a user-friendly front-end interface to swap native assets across L1 chains, and also acts as a DEX aggregator to support a broader range of assets.

How THORSwap (THORChain) makes money

THORSwap generates revenue from traders' swap fees, affiliate fees from trading activity on THORChain, referral fees from DEX aggregators, and value accrual from other THORChain ecosystem products. The THORSwap treasury receives 25% of the protocol's revenue, while the remaining is distributed to THOR stakers (vTHOR).

How you make money on THORSwap (THORChain)

You can provide liquidity on THORSwap to earn trading fees and protocol rewards (paid in THOR). vTHOR holders can also stake on the platform to earn 75% of all protocol revenue.