A Peek At Thor Chain’s Pooled Validators

Source: Twitter

The goal of this dashboard is to show which new entities are participating in pooled validators that did not participate in classic validators.

Introduction

DEX built by THORchain, THORswap is a cross-chain exchange that leverages THORchain’s features to provide instant liquidity and trade cryptocurrency within the network. By removing the barrier of token standards, THORswap allows users to direct exchange tokens on different blockchains with just one click. That means we can say as a native cross-chain liquidity platform, ThorChain was created. Without wrapping / bridging or surrendering custody of your funds, you can swap native assets across blockchains. 

RUNE functions as a liquidity connector between two types of assets. When swap transactions are performed, the token ratio changes, resulting in a difference in the exchange rate. As the price in the pool is different from the outside market, arbitrage traders will enter the trade and profit from the difference. This process is repeated at a high frequency. Eventually, THORChain settles with the external market. For LPs that stake for over 100 days, THORChain has implemented a permanent loss insurance formula similar to Bancor’s.

If we want to swap BTC for ETH, it first converts BTC into RUNE, then RUNE into ETH. In this case, RUNE acts as a liquidity connector between two types of assets.

Pooled THORNodes

THORChain is served by THORNodes. THORNodes consist of a cluster of multiple independent servers. Through communication and cooperation, all THORNodes form a cross-chain swapping network.The THORNode is a trusted agreement between the Operator and Bond Provider to bootstrap enough capital for a THORNode to operate efficiently. A higher level of security is provided by the Network, and more investors have access to yield-bearing bond space through RUNE.

A THORNode must churn in a minimum of 300K RUNE to be considered a THORNode. However, if bond competition increases, this number could rise dramatically. Many people lack both the technical skills and at least 300K $RUNE to run a Validator, which means there are fewer Node Operators to secure THORChain. We can use the pooled THORNode in this situation. The purpose of pooled THORNodes is to allow skilled node operators to bootstrap enough capital to run a THORNode via a trusted agreement with known bond providers (up to 6).There will be a fixed 20% fee taken from all rewards from bond providers’ bonds. Bond providers can bond and unbond to the node, earning rewards based on the amount of bond they contribute.

This information can be seen in the tweet below.

Approach

In this dashboard, using the memo from the Thorchain.bond_events table, we extracted data about the new entities participating in pooled validators, which did not participate in classic validators.

  • In this section, we can see how many Validator nodes there are by category (classic versus pooled).
  • What is the growth trend for Pooled Node operators
  • Our next view shows how many nodes are set up by operators
  • Following that, we can see how new validators have grown in Pooled Nodes
  • Lastly, we can see the distribution of nodes based on their bond provider numbers

NOTE:

  • Pooled Validator: In our definition of a pooled validator, we mean a validator with at least  one bond provider whitelisted. 
  • Classic Validator : Classic validators are all those that are not pooled. 
  • Active Validator: Essentially, this is a node that is being churned in and producing blocks.  Generally, nodes with sufficient bonds do not spend too much time in non-active states, which is why we only pay attention to active nodes.

Validator Nodes Categorization

We see from the graph below that validator nodes are grouped according to category. As you can see, the total number of validators across classic and pooled nodes is 309. Of the two categories, Classic is the biggest contributor (91.91%) to the total number of validators. The pooled node contains the fewest validators and the classic node contains the most validators (284) .

A Look At The New Participants In Pooled Validators

Here we can see the growth of pooled node operators since March 2022 on weekly basis. We can see here that there are 48 different pooled nodes between March 2022 and September 2022. March 20-26, 2022 had the highest number of pooled nodes (17), and April 10-16, 2022 had the lowest number of pooled nodes (1).

Here from the below graph we can see the number of nodes which are setup by node operators . Among the 48 nodes, the top 2 node operators accounted for 33.33% of nodes, while the top 3 node operators accounted for 54.17%. Among the Nodes under the Thor1tcet6mxe80x89a8dlpynehlj4ya7cae4v3hmce, the lowest number is 1 (thor14vwpc3dfmccpc93f5dm54l5uua5v6w03e4z7pg) and the highest number is 8 (thor1tcet6mxe80x89a8dlpynehlj4ya7cae4v3hmce) . The majority of node operators setup their nodes with one node, as shown in the image below. 

The graph below illustrates the  growth of new bond providers in pooled nodes since March 2022. A total of 37 different New Bond Providers have been identified. In this , we observed a maximum of 4 new bond providers, and in April 03-09, 2022, we observed a minimum of 1.

Based on the number of bond providers since March 2022, there are 25 different node addresses. Out of the 4 bond labels, Bond Providers 3 contributes the most (36% of the total Node Address). The lowest number of Node Address is 2 (6 bond providers) and the highest number is 9 (3 bond providers). 

Observations

  • Based on the analysis above, we can determine that there are a total of 309 validators across classic and pooled nodes. Of the two categories, Classic is the biggest contributor (91.91%) to the total number of validators. Pooled nodes have the smallest number of validators (25), while classic nodes have the largest number (284) of validators.
  • Out of 48 nodes, the top two node operators accounted for 33.33%, while the top three node operators accounted for 54.17%. Among the Nodes under the Thor1tcet6mxe80x89a8dlpynehlj4ya7cae4v3hmce, the lowest number is 1 (thor14vwpc3dfmccpc93f5dm54l5uua5v6w03e4z7pg) and the highest number is 8 (thor1tcet6mxe80x89a8dlpynehlj4ya7cae4v3hmce) . As shown in the above analysis, most node operators set up their nodes with one node. 
  • In March 2022, pooled bonds were introduced, as indicated in the tweet above.
  • Based on the above analysis, a total of 37 new bond providers have been identified. A maximum of four bond providers were observed in a week during this period, while a minimum of one was observed during April 03-09, 2022. 
  • According to the number of bond providers since March 2022, there are 25 different addresses for nodes. Given that the number of nodes has increased by more than 20%, pooled bonds proved successful!

Reference Query

with bond_events as (
SELECT 
	SPLIT(memo, ':') as tokens,
  	tokens[1]::string as node_address,
  	tokens[2]::string as bond_provider_address,
  	from_address AS node_creator,
  	asset_e8/ pow(10,8) as rune_bonded,
  	
  	*
FROM thorchain.bond_events
WHERE memo ilike 'BOND:%:%'
  
),
bond_providers as (
SELECT 
  	block_timestamp,
  	node_address, 
 	bond_provider_address
FROM bond_events
QUALIFY row_number() over(partition by node_address order by block_timestamp ) > 1
)
select 
	node_address,
  	count(bond_provider_address) + 1 as bonders
from bond_providers
GROUP BY 1

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