Thorchain, which is built on the Cosmos blockchain, is a decentralized liquidity protocol that specializes in cross-chain connectivity, allowing traders to swap tokens between different networks. It connects a ever increasing amount of chains, currently it provides services for

• BTC
• ETH
• BNB
• TERRA
• BCH
• DOGE
• LTC

Terra Collapse & ThorChain

Terra which was one of the TOP 10 cryptocurrencies experienced a total collapse in mid May 2022. Prices of most Terra assets went to basically 0 (including LUNC and USTC), the chain experienced heavy congestion and was halted several times. This triggered a automatic suspension of trading with the Terra chain.

Above: Terra trading stopped resulting in the prize being frozen in ThorChains liquidity pools

Resolution of the Chain Halt

Instead of leaving the remaining RUNE in the LUNC & USTC liquidity pools up to bots, which I have looked into in a previous dashboard, it was decided that liquidity providers will be able to withdraw the RUNE that is left from their deposit.

How much RUNE is it & Where did it go?

Findings

• 2/3 of the RUNE is being held in the wallet used for withdrawing it
• 1/4 of the RUNE has been added to other pools
• 1 / 10 has been swapped for other assets (exiting the ecosystem)

Findings

• Most RUNE has been put into pools that are are known to be more stable
  • Stablecoins
  • High market cap coins (mostly BTC which held up well during the bear market till recently)

Deeper Look at RUNE movement into swaps

=> We will not look at the < 5% of RUNE that has been moved to other addresses

Deeper Look at RUNE movement into liquidity pools

Findings

• There also is a clear tendency towards more stable assets
• The percentage of stablecoins is a little smaller than in the liquidity pool section
• Around 60k RUNE was swapped for ETH.THOR => Not leaving the ecosystem
• Only a small percentage of those assets are synthetics
  • Most of them are leaving the ecosystem

Concluding

• While about 20% of assets that were left in the pool ended up being sold and moved out of the ecosystem most of those assets still remain as RUNE in the liquidity provider wallets.
• Only few users decided to move their assets back into liquidity pools (which makes sense considering the current bear market)
• I personally believe that this solution resulted in a better outcome for the ecosystem then opening trading would have had. (Referring to my dashboard linked above)