Summary

New features were added such as RUNEPool — a new Dual Liquidity primitive. The network held a hard fork, updating the Cosmos SDK version and adding support for Bitcoin Taproot addresses. Nodes implemented a minimum swap fee and also a RUNE burn for system income. There is an effort to de-risk and simplify the base layer, pausing new loans and reducing the size of the Savers program to make way for the new App Layer. The App Layer will remove risk from the base layer of the network and allow new teams to deploy smart contracts that can tap into THORChain’s liquidity. In addition to the App Layer, the main focus of the development teams, developers are also working on: Base & Solana chain integrations, connecting to IBC, and improving the experience for Liquidity Providers.

What’s new to THORChain in Q3 2024?

RUNEPool

RUNEPool has been launched on THORChain, creating a new way to provide liquidity with RUNE. Earn a RUNE yield by providing liquidity on-chain with a diverse group of blue chip asset pools. More improvements to RUNEPool will be launched in the future. 

Minimum Swap Fee

Nodes have implemented a minimum fee that are charged on swaps by voting on the `L1SLIPMINBPS` mimir. The value has been changed from 0 (no minimum) to 15 basis points. Layer 1 swaps are now charged a minimum of 15 basis points (for a single-swap) or 30 basis points (for a double swap). This is expected to increase system income to nodes and liquidity providers. There is an ongoing campaign to lower the fees to 8bps, since it is charged on each leg of the trade for L1 <> L1 swaps.

ADR-17: Burn System Income Lever

ADR-17 was passed and implemented which will take a portion of system income and remove it from the maximum supply. The starting value for this parameter `SystemIncomeBurnRateBP` is 1, meaning 0.01% of system income will be permanently removed from the maximum RUNE supply of 500m.

Hard Fork

THORChain successfully hard forked, removing unnecessary chain state, removing old code, upgrading the Cosmos SDK version of THORChain and enabling EdDSA support. Due to the Cosmos SDK versio upgrade, future upgrades should now happen seamlessly.

Taproot Support

Support for Taproot addresses for Bitcoin has been added in the hard fork. Swaps can now be sent from or received by BTC taproot addresses.

Recover Keyshare Backups tool

A new tool to help nodes recover old keyshare backups of historical vaults for fund recovery

Disable synthetic asset swaps

Synthetic asset swaps have been disabled in favor of Trade Assets. Synthetic assets can only be minted by adding to Savers. Synthetic assets can still be redeemed for their native counterparts. Users holding synthetic assets should redeem them.

Maximum Confirmation Counts

Confirmation count ceilings were implemented for multiple chains. This creates a cap on the amount of confirmations that THORChain will wait for before processing an inbound transaction to create a smoother swap experience, while maintaining its security posture

• BTC = 3 blocks (30 minutes)
• LTC = 12 blocks (30 minutes)
• BCH = 15 blocks (2 hours and 30 minutes)
• DOGE = 40 blocks (40 minutes)
• ETH = 14 blocks (3 minutes)

New Loans Paused

Nodes have voted to pause the opening of new loans under the THORFi lending program. Existing loans can still be closed out and will remain in the protocol indefinitely.

Roadmap — What to expect in the future

A number of new features are being worked on by Nine Realms and other protocol developers. Some may change in design or scope before being released to THORChain mainnet. Notably, this quarter marks a pivot to focusing on THORChain App Layer to remove risk from the base protocol layer.

Base Chain Integration

Base may be the next major chain connected to THORChain. Nine Realms team is working on delivering to mainnet.

Solana Chain Integration

Solana requires additional background work that must be completed, since it uses a different encryption type (EdDSA) compared to other THORChain connected chains (EDDSA). The Nine Realms team has been working on the architectural changes needed to support Solana and other chains using this encryption type like TON.

Scale Back THORFi — De-risk the Base Layer in favor of the App Layer

The creation of loans has been stopped. Savers yield scaling has decreased slightly after a vote, and there are further active proposals to tune down the synthetic asset utilization of the network by scaling down the Savers program by dropping yields. This is part of a coordinated effort to de-risk the base layer of the protocol and its liquidity providers. So far, nodes have been in support of these changes and may continue to scale down THORFi.

THORChain App Layer

THORChain will add a CosmWasm execution environment known as the App Layer. Previously, new primitives had to be added to the base layer of thorchain, creating unnecessary security risk. With a CosmWasm execution environment, new protocols can be built using THORChain’s liquidity without adding additional risk to the base layer. Teams like Kujira and Levana have already stepped up to signal their intent to build protocols on the App Layer like Lending, Orderbooks, and Perps. The move to the App Layer will simplify the base layer of thorchain, making it more predictable and secure, without sacrificing the innovative products that THORChain wants to offer. Teams interested in building on the App Layer should get in touch with Nine Realms now and get involved in the Developer Discord.

IBC Connection

THORChain will use IBC to bring additional assets into the App Layer, adding additional liquidity that can be used by the network and greatly increasing the number of chains that THORChain is connected to.

Bridge Assets

Bridge Assets allow L1 tokens to be deposited to THORChain, creating a new native asset, which can be transferred between accounts and over IBC and integrated with CosmWasm smart contracts using standard Cosmos SDK messages. They also replace Trade Accounts in providing professional traders (mostly arbitrage bots) a method to execute instant trades on THORChain without involving Layer1 transactions on external blockchains.

Active Yield

Part of an active campaign to make the Liquidity Provision experience better on THORChain. Active yield will accrue yield outside of the liquidity position, rather than automatically compounding yield earned and subjecting it to impermanent loss. Yield will also be able to be “streamed” to the Layer 1 asset of your choice at regular intervals.

Ethereum Router V5

Upgrades to the Ethereum Router for transferOutAndCall, as well as adding support for Batched Outbounds.

Pending Governance and ADRs

Mimir Vote — Max Bond Providers

The maximum number of bond providers to a node is currently set to 10. There is a campaign to increase the maximum number of bond providers to one node to 100.

ADR-19: Auto Bond

This ADR will create a module that will allow anyone to provide bond to the network, without needing to be whitelisted to a specific node as a bond provider. This ADR is proposed, but currently shelved due to the amount of excess security on the network.

Deleveraging Synths by lowering Savers Yield

There is a vote underway to remove the network’s reliance on THORFi features like Savers. There is a campaign to reduce the maximum synth utilization at which Savers receive yield from 50% to 33% of the pool’s depth. If passed, this will reduce the yield given to Savers, likely causing some to withdraw, decreasing the total liability of Synthetic Assets in the network.

Dropping Outbound Delay

There is a temperature check to possibly reduce the maximum outbound delay from 1 hour to 30 minutes.

For Arguments

• last 3 make pause rehearsals came in at <10mins
• faster swap handling for all users

Against Arguments

• less time to react to a major incident, relying more on community flag + node pause to capture a fund loss
• bounty hunters just need to show they can extract funds after 30 mins, not 72mins

Source : THORChain - Oct 7, 2024