Our objective in this article is to determine when a new wallet is created, where does it get its $RUNE? Does it come from a direct transfer or from a centralized exchange? Would you consider upgrading $RUNE from BNB.RUNE or ETH.RUNE? Would you prefer a swap from another chain’s asset to $RUNE? Could you please let me know which chain/asset they’re coming from if it’s a swap? Are there any trends you can observe over time?
An Overview About THORchain
With THORchain, users will be able to exchange tokens from various networks, including Bitcoin and Ethereum, with tokens from other networks. To trade cryptos, such as Bitcoin and Ethereum, traders and investors use decentralized exchanges, which are unable to facilitate the operation on native networks.As a result of its interoperability, THORChain enables users to directly exchange different cryptos without ever leaving the protocol and without requiring the use of any intermediaries. By depositing cryptos into the THORchain decentralized exchange, users can earn a yield on their money. Users can also borrow cryptocurrency within minutes.
How does THORchain Works ?
The THORchain exchange employs the continuous lending pools protocol of the Bancor DEX to enable cross-chain trading of non-native tokens. Market data for all supported cryptocurrencies is deposited into liquidity pools along with RUNE, the native token of the network. The THORCh automatically exchanges one token for RUNE, then trades RUNE for the other token, when a user initiates an exchange. This is the mechanism that enables non-custodial exchanges between non-native assets.Liquidity pools are created by operative nodes, and user funds can be deposited there for others to borrow, allowing them to earn a yield for the amount they deposit.THORChain relies on the Proof of Stake consensus mechanism, which requires RUNE tokens to be staked in order to verify swap transactions.
What Is THORSwap?
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.
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.
How to do swaps on the THORchain?
Assets on linked chains or assets connected to the network can be swapped. Users can swap any asset from any connected chain or asset to any other asset on the network, or to RUNE, if they want to.
The idea behind THORChain liquidity pools is that swaps are possible by combining assets deposited by liquidity providers into one pool. For example, a pool may consist of Bitcoin and RUNE, THORChain’s own asset.These pools are referred to as Continuous Liquidity Pools, since RUNE, which is in each one, links them all together to create a continuous liquidity network.
THORChain swaps 2 belongings between two pools every time a user swaps 2 assets. Swap to RUNE in the first pool,move the RUNE into the second pool, and swap to the desired asset in the second pool with the RUNE from the second pool. This swap is handled by the THORChain state machine all at once, so RUNE is never handled by the user.
Analysis Of Different Ways For New Users To Get $RUNE Tokens
There are many ways to find where a new user gets their $RUNE, as shown below:
- Does it transfer from Centralized Exchanges (CEX)
- The general transfer system
- Which comes from upgrading $RUNE from BNB.RUNE or ETH.RUNE
- You can swap from an asset on another chain to a $RUNE asset
As shown in the following charts, we can categorize new users who have transferred from Centralized Exchanges (CEX) or General Transfers as ‘CEX Transfers’ or ‘General Transfers’, respectively. Similarly, upgrading from BNB.RUNE or ETH.RUNE to $RUNE is considered an ‘Upgrade’, and swapping from another chain’s asset to $RUNE is considered a ‘Swap’.
In the period April 25 to June 28, 2022, there were 689 CEX new users were got their $RUNE .A maximum of 108 users was observed on June 15, 2022, and a minimum of 1 users was observed on April 25, 2022.The number of users on June 15, 2022 is higher than usual.
From the below graph we can see the new users which are getting from general transfers over a period of time. The total number of users between March 30, 2022 and June 28, 2022 was 11.37K. It was observed that the maximum number of users was 1.97K on April 8, 2022. The number of users in May 26, 2022 and April 9, 2022 is lower than normal, while the number of users in May 25, 2022 and April 7, 2022 is higher than normal.
As we can see from the graph below, new users have been added over time as a result of upgrades. From March 30, 2022 to June 27, 2022, there were 909 users. A maximum number of 72 users was observed on June 25, 2022, and a minimum number of one users was observed on May 17, 2022. The number of new users getting their $RUNE from upgrades like BNB.RUNE or ETH.RUNE is increasing as of June 20,2022.
We can see from the graph below that new users have been added over time as a result of Swap. There were 15.67K users between March 30, 2022 and June 27, 2022. A maximum of 1.23K users was observed on April 8, 2022, and a minimum of 8 users was observed on June 28, 2022. The total number of users on March 31, 2022 was lower than normal, but on April 8, 2022, it was higher than normal. New users who get $RUNE tokens through swaps are more numerous initially. However, we can see that they are gradually decreasing.
According to the below graph, the Category Swap contributes the most to the total number of users. $RUNE is received by the lowest number of users from CEX Transfer, while the highest number of users receives it from Swap. It was observed that the maximum number of users was 3.22K on April 8, 2022.
The total number of users is 28,632. Out of the 4 categories, Category Swap contributed the most (54.72%). Users with the lowest total are 689 (CEX Transfer) and those with the highest total are 15,666 (Swap).
Observations
- Based on the above analysis, we can see the new users are receiving more than 50% of their $RUNE through swaps and then most of the $RUNE is being obtained through general swaps. By observing these swaps and general transfers, we can observe that the most new users received their $RUNE in March and April 2022. The $RUNE they receive from swaps and General Transfers is decreased afterward.
- During the last few weeks, the $RUNE Tokens that are getting through Upgrades for New Users have increased. Currently, as of June 20,2022, there is an increase in new users receiving $RUNE through upgrades like BNB.RUNE and ETH.RUNE.
- The above analysis also shows that most of the new users who get their $RUNE through CEX transfers are seen from June 13, 2022 onwards not much earlier. It was observed that 108 users used the service on June 15, 2022, and a minimum of one user used the service on April 25, 2022. The number of users who are getting $RUNE through CEX transfers on June 15, 2022 is higher than usual.
- In response to the extreme volatility in the crypto market, we begin to see a decline in new users for the $RUNE which are receiving a variety of new users.