Pooled RUNE Validator Distribution

Source

The goal of this dashboard is to show how the bond distribution looks for pooled validators (%-wise and absolute number of RUNE)? Is the split evenly distributed, is the variance high, etc.? (possibly implies lowering the barrier for people who have smaller but significant amounts of RUNE)

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

With this dashboard, we extracted information about the distribution of validators by RUNE bonded in pooled nodes using the memo from Thorchain.bond_events.

  • As a first step, let’s look at the growth of new validators in pooled nodes
  • Percentage, distribution of validators by RUNE bond in pooled nodes
  • Distribution of validators by RUNE bonded in pooled nodes
  • Furthermore, we can see the number of nodes set up by node operators
  • As well as the distribution of nodes based on the number of bond providers 

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.

Here from the below graph we can see the percentage distribution of validators by RUNE bonded in pooled nodes since March 2022 . A quarter of bonding events were contributed by less than 100 RUNE categories while more than half of bonding events (less than 100 RUNE, 300K+ RUNE, and 100-500 RUNE) were contributed by the top 3 categories. The lowest Bonding Events total is 8 (500 – 1K RUNE) and the highest is 66 (less than 100 RUNE).

We can see that out of all validators, almost 25% are bonded in pooled nodes with less than 100 RUNE tokens. These validators have a great advantage because they have a very small amount of RUNE and can also bond with each other. As a result, we can consider this Pooled THORNode to be a huge advantage. Through this, I hope that many people with less than 300K RUNE tokens can also become validators on THORchain. As a result, bond providers can bond and unbond to the node, earning rewards according to their contribution. Those who contribute less RUNE tokens also have a chance to earn rewards. 

The distribution of validators by RUNE bonding in pooled nodes revealed that a quarter of bonding events were attributed to less than 100 RUNE categories, while more than half (less than 100 RUNE, 300K+ RUNE, and 100-500 RUNE) were attributed to the top three categories. ‘500 – 1K RUNE’ is the lowest amount of Bonding Events, and ‘less than 100 RUNE’ is the highest amount of Bonding Events.

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. 

Here we can see the distribution of nodes by number of bond providers since March 2022. 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

  • The tweet above indicates that pooled bonds were introduced in March 2022.
  • Our analysis identified 37 new bond providers based on the above findings. 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. 
  • We can see that out of all validators, almost 25% are bonded in pooled nodes with less than 100 RUNE tokens. These validators have a great advantage because they have a very small amount of RUNE and can also bond with each other. As a result, we can consider this Pooled THORNode to be a huge advantage. Through this, I hope that many people with less than 300K RUNE tokens can also become validators on THORchain. As a result, bond providers can bond and unbond to the node, earning rewards according to their contribution. There is also a chance to earn rewards for those who contribute less RUNE tokens. 
  • Based on the above analysis, we can see 48 nodes when we consider the number of nodes configured by the operator. According to the above analysis, most node operators set up their nodes with one node. 
  • 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 bonders 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_events as (
SELECT 
	from_address,
  	case when ( split(memo, ':') [0] ilike '%bond%' and split(memo, ':') [2] is null ) then e8 / 1e8
    end as rune_bonded,
  	tx_id,
  	bond_type,
  	case 
  		when rune_bonded >= 300000 then '300K+ RUNE'
  		when rune_bonded >= 150000 then '150K - 300K RUNE' 
  		when rune_bonded >= 75000 then '75K - 150K RUNE' 
  		when rune_bonded >= 25000 then '25K - 75K RUNE'
  		when rune_bonded >= 10000 then '10K - 25K RUNE' 
  		when rune_bonded >= 5000 then '5K - 10K RUNE' 
  		when rune_bonded >= 1000 then '1K - 5K RUNE'
  		when rune_bonded >= 500 then '500 - 1K RUNE'
  		when rune_bonded >= 100 then '100 - 500 RUNE'
  		else 'Less than 100 RUNE'
  	end category  
FROM thorchain.bond_events
WHERE rune_bonded >= 1
  and from_address IN (select from_address from bonders)
  
)

SELECT 
  category,
  count(tx_id) as bonding_events
FROM bond_events
GROUP BY category

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