THORChain is a decentralized liquidity protocol that allows users to swap assets between different blockchains. This is very different from a DEX for reasons we’ll see below, although THORChain does incorporate native decentralized exchanges like Asgardex/Skip exchange or ThorSwap. This is because one of the main goals of THORChain is, indeed, to provide cross-chain trades.

THORChain pays liquidity providers from the fees collected by the pools they contribute to, along with inflationary emissions to offset impermanent loss. The emission curve “is designed to start at around 30% APR and target 2% after ten years. At that point, the majority of the revenue will come from fees.” Users are also paid from THORChain’s token reserves. THORChain liquidity providing rewards are, as in most AMM platforms, proportional to the volume of trade going through each pool. Pools earning more fees are also incentivized with more THOR RUNE block rewards [1].

It has a maximum supply of 500m native RUNE, and 44% of this supply was set aside and allocated for Block Rewards.

What are Block Rewards? They are that portion of the reserve designated to pay out to Node Operators and Liquidity Pool depositors for their participation in and securing of the network. As said, The Block Rewards are set via an emission curve over a ten year span, which can be tweaked and is designed to slowly reduce towards a constant value in the far future [2].

The intention of this dashboard is to provide an overview of the additional swaps required to offset emissions on the Thorchain network.

As said before, THORChain started out with high block rewards with an idea to reduce them over time. Block rewards will slowly decrease by 1/6th each year over a period of 10 years. This approach, in theory, incentivizes early adoption of the platform.

Liquidity providers earn a yield on the assets they deposit. This yield is made up of fees and rewards.

Fees are paid by swappers and traders. Most swaps cause the ratio of assets in the liquidity pool to diverge from the market rate. This change to the ratio of assets is called a 'slip'. A proportion of each slip is kept in the pool. This is allocated to liquidity providers and forms part of their staking yield. Rewards come from THORChain's own reward emissions. Reward emissions follow a predetermined schedule of release. Rewards also come from a large token reserve. This token reserve is continuously filled up from network fees.

To demonstrate this statement we will track the following main metrics:

• Current average block rewards / fees ratio

• Current number of swaps required to Offset Emissions

• Block rewards and fees over time

• Average reward/fees ratio over time

• Swaps vs swaps required over time

In general terms, there have been created a total of more than 32M of block rewards so far on Thorchain, generated more than 14M of RUNE in fees.

If we take this metrics into account and represents their correlation over time, we can see how the current average block_rewards/fees ratio is at 4.1. This numbers says as that the current number of swaps on Thorchain should be 4.1x more to Offset Emissions. This number has been decreasing constantly over the past months.

Considering the current number of swaps and calculating the numbers by months, around 4M of swaps should be done on Thorchain in a single month.

Looking at the monthly metrics, we can see in the first image the number of monthly bock rewards and the total fees generated. As we can see, the number of fees has been increasing since the stop event on the past September. But since October 2022, the fees have been increasing until October 2023, and now seems constant over the pat few months. The monthly fees not follows the same evolution. In this case, the number of block rewards has been increasing since the inception. But the uptrend stopped in January 2022. From that, the block rewards remained constant.

Representing the average relationship between these two metrics, we can see the evolution of the ratio of block rewards vs fees. It increased during the first month but since October 2021, the ratio started to decay slowly reaching the current 6.28 value.

The final images shows the curent number of swaps emitted on Thorchain and the total number of swaps required to Offset Emission each month. Here we can see how the last month a total of 462k swaps were generated and 2.9M of swaps were required.

• So far, there have been created a total of more than 32M of block rewards so far on Thorchain, generated almost 14M of RUNE in fees.
• The current average block_rewards/fees ratio is at 4.1. This numbers says as that the current number of swaps on Thorchain should be 4.1x more to Offset Emissions.
• Around 4M of swaps should be done on Thorchain in a single month (considering the past month value).
• The number of fees has been increasing since the stop event on the past September. And since October 2022, the fees have been exploding until finals 2023. The monthly fees not follows the same evolution.
• The number of block rewards has been increasing since the inception. But the uptrend stopped in January 2022. From that, the block rewards remained constant.
• The ratio of block rewards versus fees increased during the first month but since October 2021, the ratio started to decay slowly reaching the current 4.1 value.
• During the last month, a total of 983k swaps were generated and 4.1M of swaps were required.