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Stablecoin Swappers on ThorChain
BNB.BUSD and ETH.USDC are the two most used stablecoins on ThorChain by both swap volume and liquidity.
As the name suggests BUSD is using the binance beacon chain as parent chain while USDC is using Ethereum mainnet.
You probably already know that the gas fees you would expect to pay on Ethereum are drastically higher than the ones you have to pay on the binance beacon chain. One would expect swaps with a small to be primarily done with BUSD, larger swaps however should be found on both as the exchange fees on ThorSwap exceed the gas fee on the parent chain at that point.
In this dashboard I will be trying to confirm this theory using on-chain data.
Additionally I will compare the results when only looking at synthetic assets as those are done directly on ThorChain and therefore the gas fee of the parent chain does not come into play.
Amount of unique swappers
Y-Axis shows number of unique swappers in that timframe. Each address that swapped from/to the respective asset in a given timeframe is counted once, no matter the amount of swaps that address performed.
FROM : Stablecoin being swapper for other assets
TO : Other assets being swapped to the stablecoin
Parent chain gas fees
The values represent the gas fee in USD users have to pay to swap to an asset on the target parent chain.
Inbound fees are not shown as those can be set by the users instead of ThorChain.
Example on how to read:
User X swaps 10 ETH.ETH for BNB.BUSD at a rate of 1 : 1000 on the 10th of May 2022. The more expensive inbound fees are not accounted for but the fees for the native transfer of BNB.BUSD to the user costs ~0.024$ on that day. If the swap would have been from BNB.BUSD to ETH.ETH the gas fee would have been ~43.23$.
Major differences between the USDC and BUSD pools:
- BUSD has signiticantly more volume, daily swappers and total swappers
- 20+ times more volume
- ~20 times more daily swappers
- 5x more users swapping from, 7x more users swapping to it
- The gas fees on BNB are mostly stable hovering at a very low 0.01$ to 0.04$
- The gas fees on ETH are comparably very high with up to 100$ at the start of the year and after a downtrend about 5-15$ at the time of writing
Time to dive into the behavior of the average swapper!
For this we will be looking at the following metrics:
- Average amount of swaps per user
- Average dollar value of each swap
- Compared to the current gas fee on the parent chain (Which percentage of the swap value are users willing to pay on gas)
Average dollar value of each swap
This shows the average dollar value of assets swapped to and from each of the stablecoin in a single swap transaction.
Most notably:
- Both stablecoins have an average swap amount of more than 1000$. Personally I used ThorChain quite a lot but never did a single swap of assets worth more than 1000$.
- The USDC swaps on average carry more value
- While BUSD From & To is very similar there is a ~2x difference in From & To average swap amount in the USDC swaps.
Hold up! ↑ Before we start I want to remind you of the dashboard parameter right above this heading ↑
It will change the granularity of the X-Axis of most statistics shown below. Due to the relatively low amount of entries I recommend using week for this dashboard.
This parameters exists to allow you to get more details if you need them. :grinning:
Average dollar value per swap VS gas fees
This shows the percentage of the average swap value that is used to pay for gas fees on Ethereum / Binance Beacon Chain.
As the gas fees when swapping from one of those stablecoins to other assets are set by the users, not ThorChain, we will not look at those here.
Most notably:
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Users generally do not want to spend more than 0.5% of their swap value for fees
- In most cases its even below 0.3%
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Even with the average swap value of USDC swaps being significantly higher the fees on ETH still make up 100+x more of the total swap value then the ones on BNB
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All time unique swappers by their total swap count
This shows the same total numbers as the all time unique swappers above but additionally splits them into their amount of swaps.
Most notably
- USDC swaps are mostly swappers that only ever do at most 3 swaps. This is a little suprising given that you do need to approve ThorChain to access your USDC tokens before you can use it. Doing few swaps is a waste of this approval.
- There are effectively no USDC swappers doing more than 20 swaps (<2% of swappers)
- While BUSD swappers also mostly consist of swappers that only ever do at most 3 swaps there is a larger chunk of 3-20 and even some >= 20 swap swappers.
Adding up results up to this point:
- USDC is used a lot less than BUSD
- The main reason for this appears to be the drastically higher gas fee
- USDC swaps usually have a significantly higher amount than BUSD swaps
- Yet the percentage of that amount going to fees is hundreds of times higher than with BUSD swaps
- Most USDC swappers only ever do less than 3 swaps with very few exceeding that and less than 2% exceeding 20 swaps
- About 50% of swappers swapping from BUSD perform 3+ swaps, 25% of swappers swapping to BUSD swap 3+ times
Now lets add synthetics to the picture
Never heard about synthetics?
Instead of natively swapping an asset, ThorChain added “synthetics” in march 2022. Those are assets living on ThorChain instead of the native parent chain and can be swapped or redeemed for the real asset in ThorChains liquidity pools. They are backed half by the real asset and half by RUNE making them a secure yet gas effective option for swappers. Instead of having to pay the high gas fees present on some parent chains like Ethereum swappers can get away with the cheap ThorChain gas fees of flat and constant 0.02 RUNE.
Identifying synthetics in the swaps table
While you cannot see if an asset is a synthetic one in the pool name you can see it in the asset name. While the native assets have a format of [Parent-Chain].[Asset Name] synthethics do use [Parent-Chain]/[Asset Name].
So a little adjustment to the previous queries will do the trick!
Expected Results
If swap fees are the same I would expect the swap behavior to also be the same when just comparing the synthetics.
Its yet again time to show some data!
Before looking at swappers lets look at volume
After BUSD had a 4x volume lead for the first section of this graph it suddenly collapsed with barely any volume being recorded in late May 2022.
As of now I cannot see a reason for this deviation.
My best guess is that the underlying data is missing something here or some other problem with the query being the issue.
Average dollar value of each swap
There no longer is a clear difference between the average dollar values of each swap between the assets. They are both hovering around the same range.
The previously seen drop in volume also had an effect on the average value per swap. Yet again I cannot say if this might be a mistake.
The best option here is to ignore that drop as the swap volume used to make that average swap amount is very low and does not say much.
All time unique swappers by their total swap count
As already discussed in the expected results we no longer see a significant difference between swapper behavior comparing synthetic USDC, and synthetic BUSD.
Given that both assets are considered safe and fully collateralized as well as the fee for using both of them being exactly equal this makes total sense.
It also shows that users do instead understand what synthetics are for and what their properties are.
One thing to note
The total unique swapper count is a lot lower compared to the native assets. While synthetics have not been around since the start of 2022 they have been around for half the timeframe we are looking at. This could be a sign of users not trusting this still relatively new technology.
Concluding
- There are clear differences between USDC & BUSD swappers
- USDC swappers are swapping more per swap and perform less swaps in total
- USDC swappers need to pay a bigger percentage of their swapped amount for gas even though the swap amoount is higher
- The BUSD pool is used a lot more
- Given the fee situation this makes a lot of sense
- When only looking at the synthetic assets the differences mostly dissapear
- No large difference in average swap counts nor a significant difference in average swap value
Thorchain
Thorchain is a blockchain centered around providing native asset swapping across blockchains.
It achieves that by having each ThorChain node connected to each of the other supported blockchains and having them receive and send transactions to those connected chains if requested on ThorChain.
As of now it supports the following blockchains:
- Binance Beacon Chain
- Ethereum
- Bitcoin
- Bitcoin Cash
- Litecoin
- Dogecoin
It also supports tokens on BNB, Ethereum using the BEP-2 and ERC-20 standarts.
