Distribution of Swaps in $RUNE and USD Values

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    Project : THORChain

    \n Bounty Name : Distribution of Swaps in $RUNE and USD Values

    \n Question: Show the distribution of swap sizes in both $RUNE and USD, both for all pools as well as broken down by pool. \n

    Date of analysis : 2022-09-06

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    What is THORChain (RUNE)?

    THORChain is a multi-currency protocol with cross-chain architecture that allows users to exchange tokens from various networks, including Bitcoin and Ethereum, with other tokens that don’t belong to the same network.

    Cryptocurrency traders and investors rely on decentralized exchanges for swapping their cryptos, for instance, swapping between Bitcoin and Ethereum, while native networks can’t enable this operation. THORChain resolves this issue by creating an interoperable environment that allows users to directly exchange different cryptos without ever leaving the protocol and without the need for intermediaries.

    The main goal of the project is to bring more liquidity to all supported cryptocurrencies as opposed to illiquid and fragmented markets of buyers and sellers who would like to exchange different cryptos without central authorities.

    THORChain also enables users to earn a yield via the THORChain decentralized exchange by depositing cryptos into liquidity pools. Within this system, users can borrow cryptocurrency in minutes.


    How Does THORChain Work?

    To enable cross-chain exchanging of non-native tokens, THORChain adapts a protocol that the Bancor DEX uses calleds continuous lending pools. All supported cryptocurrencies that are not native to the network are deposited into liquidity pools together with the native token RUNE.

    When a user initiates a trade, i.e. an exchange between two non-native assets, the system automatically exchanges one token for RUNE, then exchanges RUNE for the other token. Essentially, double swapping with instant execution is what enables non-custodial exchanges on the THORChain protocol.

    At the same time, users can deposit their funds into liquidity pools for other users to borrow, thereby earning a yield based on the amount they deposit. Liquidity pools are created by operative nodes. Nodes are also in charge of validating swaps for which they are incentivized. The THORChain protocol relies on the Proof of Stake consensus mechanism, which requires the staking of native RUNE tokens.

    There are 100 to 300 validator spots, with Nodes needing to bond at least 1 million RUNE to earn a validator spot. Nodes are hosted on an added layer with extra security to facilitate control over the network.

    Swap Volume Over Time

    The volume of transactions in the world of cryptocurrency depends on many factors, one of the most important of which is the price status of cryptocurrencies, so to speak, if we are in a bear market or a bull market, the volume of transactions is very different. Sudden price changes increase the volume of transactions. If we want to look at the native token of the Thorchain network, i.e. RUNE, we will notice that whenever the price of this currency changes suddenly, the volume of swaps has increased. The largest volume of swaps recorded was on June 13, and in this volume of swaps reached 39M RUNE, and as I mentioned, the drastic price changes cause this increase in volume, so that the native token of this network had 20% price changes on that day. If we want to check the volume on a monthly basis, we will find that the largest volume is for April of this year and the total volume of transactions in this month is 467M RUNE.

    The percentage of RUNE price changes in this month is 60% and has caused a record volume of swaps. In the last 3 months, the volume of transactions has decreased a lot, and one of the most important reasons for that is the relative stability of the cryptocurrency market, which has made there are no competitors for users to trade with.

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    Swap Size In Total & Over Time

    Most of the volume of registered transactions is between 100 and 500 RUNE and a total of 2.65 million transactions were made in this volume. It is noteworthy that more than 50% of swaps have been done in this volume. In total, the lowest number of swaps is for transactions with a volume of more than 10kRUNE, although the number of swaps is 8,500, which is not a small number.

    Over time, even with the ups and downs of the volume of transactions, this group has continued to be the leader in the volume of swaps

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    Pools In Total & Over Time

    As you can see, one of the pools has the largest volume of swaps by a large margin. The BNB.BUSD pool has the largest transaction volume and its transaction volume has reached 4.4B dollars. This pool alone has more than 38% of the volume of swaps. After this pool, the BTC.BTC pool has in the second place in terms of the volume of swaps, and the volume of swaps is around 400M dollars.

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    Thanks for reading

    \n All data used are from:Flipside Crypto

    My Twitter :Sepehrmhz8

    Conclusion

    In the general process of the volume of swaps, the amount of swaps and the number of swaps depends on many different factors and one of the most important reasons is the bullish or bearish state of the market.

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    Methods

    Table I used:

    flipside_prod_db.thorchain.swaps

    Metrics

    • Daily Swap Volume($RUNE) & (USD)
    • Monthly Swap Volume($RUNE) & (USD)
    • Total Swap Volume ($RUNE) & (USD)
    • Swap Size($RUNE) & (USD)
    • Daily Swap Size($RUNE) & (USD)
    • Monthly Swap Size($RUNE) & (USD)
    • Total Pools Swap Volume($RUNE) & (USD)
    • Daily Swap Volume per Pools($RUNE) & (USD)
    • Monthly Swap Volume per Pools($RUNE) & (USD)