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THORChain Frequently Asked Questions and Issues |
Providing liquidity on THORChain creates an opportunity for holders of stagnant assets (e.g. BTC, ETH, BNB) to earn a return or yield on their asset. Traditionally, with a CEX or 0x style exchange, trades require an order book of bids/asks (buys/sells) at a specific price, because if an investor wants to trade one asset for another, you need a buyer and a seller. Decentralised exchanges like UniSwap and THORChain utilise liquidity pools to provide more fluid access to trades. Liquidity pools are the way decentralised exchanges maintain a reservoir of assets, enabling buyers and sellers to exchange assets on demand. Liquidity Providers are therefore those network participants who deposit their assets into liquidity pools in exchange for a share of the trading fees generated by the trading of buyers and sellers.
THORChain depends on its continuous liquidity pool design and arbitrageurs to set prices. When pools become imbalanced, arbitrage bots trade to rebalance them. THORChain knows the exchange rates between external asset pairs because RUNE binds all pools together. See Prices.
Unbalanced pools represent a profit opportunity for arbitrage traders -- if a trader can purchase a token at a lower price on THORChain and sell it for a profit elsewhere, they will. These trades re-balance the pool and ensure that prices accurately reflect the market value. These pool balancing trades happen 24/7 via arbitrage bots interacting with the protocol's API directly. It's even possible to run an arbitrage bot of your own!
BEP-2 RUNE: Binance, FTX and Kucoin.
ERC-20 RUNE
➜ UniSwap
For Native RUNE**,** see interfaces below.
Note:
- There is no BEP20 RUNE in existence.
- You can only buy Native RUNE, BEP2 RUNE or ERC20 RUNE from the market.
- Only native RUNE is used in the THORChain Protocol.
Many Wallets work with THORChain. Two community created ones are:
Other Wallets include:
- Trust Wallet
- Keystore Ledger
BEP-2 and ERC-20 RUNE can be stored in many popular wallets like Trust Wallet, Ledger, Safepal etc.
Multi-Chain Chaosnet has an upper limit on pooled liquidity, known as the “Liquidity Cap”. This is an upper limit across all pools combined; and once reached, no more liquidity can be added until the caps are raised. This mechanism is currently in place to protect the network and its users. Users can check the Fund cap status at: https://app.thorswap.finance/. 
Follow THORChain Twitter to not miss any #RAISETHECAPS updates.
➜ THORChain Twitter: Raise the cap Announcements will be made via official channels.
- Current Chains — BTC, ETH, LTC, BNB, BCH
- Tokens such as: ERC-20 (USDT and SUSHI), BEP2 (BUSD and BTCB).
- See full list at https://viewblock.io/thorchain/pools or https://thorchain.net/#/pools
You can many interfaces to interact with THORChain. See Exchanges.
Not quite. “Providing liquidity” in THORChain is not the same thing as staking because even if you provide only 1 asset (asymmetrically add), THORChain will automatically be separated into 2 equal parts: 50% Assets and 50% Rune. You will always have exposure to both assets.
There is no minimum or maximum time or amount. Join and leave whenever you wish. There is however a required confirmation time before THORChain credits you with liquidity when adding or swapping to protect against Reorgs. Wait time is based on:
- Total Asset amount (in a specific block of a specific blockchain)
- Per block reward of the chain
- Block time Required confirmations = Total Asset Amount (in a specific block of a specific blockchain) divided by the chain's per block reward Then that is multiplied by block time to get the approx "wait time". See Confirmation-Counting.
Regarding ILP, Liquidity Providers will receive 100% IL protection after they have been in the pool for 100 days, getting 1% ILP coverage for each day in the pool - but the liquidity can be withdrawn at any time.
➜ THORChain - Wait Times and Fees Explained! video
Outbound Throttling will delay large outbound transactions. The following are rough approximations for delays:
- $100/block– 4 seconds
- $500/block– 20 seconds
- $1000/block– 40 seconds
- $5000/block– 2.3 minutes
- $10k/block— 5 minutes
➜ You can watch it at https://thorchain-scheduled-tx.web.app/
YES! Liquidity Providers will receive 100% IL protection after they have been in the pool for 100 days, getting 1% ILP coverage for each day in the pool. Essentially this means you are adding 1% protection for every day that you provide liquidity. 49 days provided = 49% IL protection, 100 days = 100% IL protection.
Impermanent Loss Protection (ILP) ensures that you will not be worse off providing liquidity into THORChain than just holding two assets, RUNE and ASSET, in your wallet. Protection is always recorded and applied symmetrically to both assets after the deposit is rebalanced to 50/50. ILP can also be thought of as deposit protection compared to holding both assets. Minimum withdrawal value will be the same as if you held both assets.
➜ THORChain and Impermanent Loss article
➜ Impermanent Loss Protection Explained video
Swap fees are dependent on the depth of liquidity pools, the deeper the pools (aka the more liquidity) the less the fee is. Swap fee also depends on the size of the deposit. Bigger deposits incur more swap fees. **** See Fees.
Yes, there is a fee for every withdrawal, whether it is an asymmetrical or symmetrical deposit.
TLDR: Transaction Fee = Inbound fee Network Fee = 3x fee charged by network Total = Sum of both
Overview of the process and why:
- Nodes Pay 1* Standard Fee from the native pools (gas pools)
- LPs get paid back 2* St Fee, they earn >1x in margin due to arbing
- Reserve gets paid back 3x, it earns 1x in margin which goes to the reserve.
➜ See Outbound-Fee.
➜ Standard Fee inbound address end point.
➜ Watch Fees and Wait Times Explained video
Will all ERC20 and BEP2 assets be supported and listed on THORChain by default?
No. Only short tail assets with high MarketCap, good velocity and economic activity would have chances to win liquidity competition to get listed. Then the community will vote.
➜ See Governance.
Yes, see Ecosystem.
No. Synths enables synthetic assets with no IL and with single asset exposure. They do not generate yield.
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No. You cannot withdraw symmetrically. You can withdraw only asymmetrically for LP you deposited asymmetrically.
Yes, because when you pool asymmetrically your asset is swapped into 50% rune and 50% asset. When swapping you are subject to slippage and fees. There are 2 types charged on asymmetrical deposits/withdrawals:
- The on-chain deposit transaction fee (inbound tx)
- The liquidity fee as a function of slip
Upon withdrawal, there will also be a transaction fee (outbound tx)
Are there slippage fees for symmetrical deposits?
No, there is only the deposit transaction fee.
If you deposit asymmetrically you can ONLY withdraw asymmetrically.
You can withdraw your symmetrical deposit both asymmetrically and symmetrically.
Yes, but the IL Protection is applied to the asymmetrical deposit after it has been converted into a symmetrical deposit (also meaning after slippage and fees). This means that the IL Protection will cover both assets. See ILP above.
THORChain uses Tendermint which is a classical BFT algorithm. 2/3 of the validators need to agree and the network values safety. The chain has instant finality and this is needed to secure cross-chain bridges.
Chaosnet minimum bond is currently: 300K Rune (MIMIR Override) - Minimum Bond In Rune) for current value.
Actual bond required is set by the market (node operators) - see average bond at https://thorchain.net/#/nodes
THORChain is planned to have 1M Rune minimum bond setting when the protocol is fully mature.
If each pool is comprised of two assets (e.g. BTC:ETH) then there will be a scaling problem with n*(n-1)/2 possible connections. By having RUNE on one side of each pool, $RUNE becomes a settlement bridging asset allowing swaps between any two other assets. Additionally, having $RUNE in a pool ensures that the network can become aware of the value of assets it is securing.
Simply put, Cross-chain bridges are a better solution than Atomic Swaps. Atomic Swaps involve a complex process of signing cryptographic keys between two parties that require interactivity. You also need a counter-party on all trades. Cross-chain bridges, coupled with continuous liquidity pools means you don't need a designated counter-party, and swaps can happen in less than a second. 1-way state pegs are better than 2-way asset pegs because assets don't need to be wrapped or pegged. Instead of having IOU tokens, real native assets can be used instead.
The goal is to have a fixed supply at all times. Instead of constantly emitting (infinite supply like Cosmos or Ethereum) or reducing the emission down to zero (Bitcoin) the network elects to match emissions to the difference between current circulating supply and the max supply, as well as burning fees. This means there is 500 million progressively emitted to nodes for security and liquidity over time. See Emission Schedule for more information.
Approximately every three days, the pending pool with the deepest liquidity is churned in (becomes an active pool). This is called a Pool Churn. Note: A pending pool must have a minimum 10K RUNE to be eligible for a churn.
This means there is an open decentralised liquidity competition where the community can vote with their liquidity. N.B. Caps will prevent voting with liquidity.
There is a set max of 100 active pools, and once achieved, deeper pending pools will be able to replace shallowest active pools. See Governance for more information.
ERC20 RUNE contract address: https://etherscan.io/address/0x3155ba85d5f96b2d030a4966af206230e46849cb 
Inbound Router https://etherscan.io/address/0xc145990e84155416144c532e31f89b840ca8c2ce ➜ Can be verified at https://thornode.thorchain.info/thorchain/inbound\_addresses
N.B. There is no contract address for BEP-2 RUNE and Native RUNE and there is no BEP20 RUNE.
I bought BNB.RUNE (or ETH.RUNE) and put them in my Keystore wallet… Why can’t I upgrade them to THOR.RUNE?
To upgrade to THOR.RUNE, you will need a very small amount of BNB or ETH in your wallet to cover the tx to upgrade. {Link to upgrade guide}
➜ How to upgrade rune guide
Make sure you have a sufficient amount of native rune to process transactions. Also be sure to check if the liquidity caps are full. If so, you will not be able to add liquidity at that time. If you see errors like “No UTXOs to send” or “Need to wait for more UTXO confirmation”; likely you are trying to spend UTXO assets (BTC, LTC, BCH) that you have just transferred into your wallet. Please wait for more blockchain confirmations, and try again later!
THORYield is a 3rd party app, sometimes there is a lag between sync, so yes, it may display incorrect information. In this case use THORSwap to see what liquidity you have provided.
Go to https://www.binance.org/en/recover and enter your seed phrase from your Trust Wallet to create a key store. https://www.binance.org/en/unlock can also be used to unlock the keystore if required.
I deposited liquidity before Ledger and TrustWallet support but I want to migrate to those wallets without removing liquidity.
You can use THORChain’s keystore wallet seed phrase for xDefi, or TrustWallet. It uses the standard BIP39 mnemonic phrase, it is compatible with all multi-coin wallets and Ledger. Simply input the seed phrase and your wallet should be imported. If you are using Ledger or cold storage, it is recommended to create a new wallet.
Please be aware of the implications of inserting seed phrase previously used in hot wallets; into a cold hardware wallet.
This is due to inefficient arb opportunities, since there is only one way bridge from bep2/Erc20 to native RUNE, and not vice versa.
There is NO direct bridge from native RUNE back to bep2/Erc20 RUNE.
This is not a concern, in the long term, BEP2/ERC20 RUNE will be upgraded to native Rune then only Native RUNE will have significant volume/liquidity.
Thorchain responds to memo data posted to its vaults or using MsgDeposit.
Using an example to withdraw (e.g. in a pending pool).
- What is the memo you want?
-:CHAIN.ASSET:10000:THOR.RUNE - What is the asset? Find in this list https://thornode.thorchain.info/thorchain/pools or go direct to pool https://app.thorswap.finance/pool/ETH.ALPHA-0XA1FAA113CBE53436DF28FF0AEE54275C13B40975 so it's
-:ETH.ALPHA-0XA1FAA113CBE53436DF28FF0AEE54275C13B40975:10000:THOR.RUNE - Which chain do you want to post the tx? THORChain, because it is cheapest (as opposed to ETH) TC:
MsgDepositETH:router.deposit(params)So we are doing a MsgDeposit with the memo above using Rune. (If BEP2, using BNB might be cheaper). - Are we sending in money? No, it's a withdraw, so send 0 or 0.00000001, whatever works.
- Which interface to use? They should all support MsgDeposit. Try ASGARDEX Desktop.