Thorchain - Block Rewards vs Swap Fees

    There are two kinds of rewards in Thorchain Thorswaps. Block rewards for Node-operators and LP-rewards for Liquidity providers. This data is clearly available in block_rewards table, broken down into its components

    These rewards are grouped as :

    • Liquidity Earnings - Rewards provided to the LPs for providing liquidty
    • Bonding Earnings - Rewards provided to LPs who provide liquidity via Bonds

    These rewards are actually generated from :

    • Block Rewards - RUNE mined for every block produced
    • Liquidity Fee - Fees generated from swapping activity on Thorchain
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    Plotting the Liquidity Fee and Block Rewards generated overall:

    • Between June and early January, 20K RUNE was distributed as Block Rewards everyday
    • Post that, the rewards were increased to 40K RUNE every day
    • Since the 40K RUNE hike was performed, the liquidity fees has been ranging between 2000 to 10000 RUNE
    • Overall, Liquidity fees tend to make less than 40% of total rewards, on most days.

    Change the POOL_NAME parameter to check for assortment of main pools and native asset pools on Thorchain.

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    In most pools you can see that Block Rewards are overwhelming. This means, the chain is still in its adoption phase. The chain will reach equilibrium and self sustaining, when the Liquidity Fees are more than Rewards while there is significant liquidity and activity still locked in the system