Anchor protocol maybe having some real competition now when it comes to earning yields on UST. Over on Thorswap the yield for UST is at 24% APY. Now the rate is taken as an average over 7 day period and since UST has only just started in the first on Thorswap the rate % still needs time to adjust, more likely be raised!
Terra on Thorswap Game Changer
Yesterday I talked about why Thorchain has big potential and briefly went over Thorchain. The day before that I discussed specifically the initial launch of Terra on Thorswap. Yet how is this such a big move? Well when Terra was set in the main net the Thorchain community pulled out the limitation of Thorswap's cap.
The main reason Thorswap could not rise in TVL, total value locked, was not because of lack of interest, but was limited due to a cap in place on the platform. Since Luna and UST has been setup on the exchange the cap has been removed and with that Thorswap is now holding over $1 billion in TVL. This makes it rank 41th in overall defi projects based on DefiLlama for 7 day TVL change. However the data is a little delayed over on DefiLlama.
First Truly Decentralized Exchange?
I post this next part of the blog as a question. That is because if those reading this post still has it as a question then they do not realize what Thorswap has achieved. Although the project has been in existence for multiple years the fact that native tokens can be swap on the exchange and stored directly at users' directed wallets it is a true decentralized exchange.
Do not get confused with the word swap when it comes to swapping between tokens. Over on Thorswap it is quite literally from one coin into another. There is a whole part of synthetics too but that is for a different post. For now the realization that you can put BTC, LTC, or ETH and swap for native UST or USDC, or USDT without limitation on the swaps is extremely encouraging.
There is no KYC, know your customer, with Thorswap and the ease of linking various wallets to obtain specific native tokens is straight forward and easy to use. This is a big step against centralized exchanges. No more heavy fees or restrictions that centralized exchanges can do to your cryptocurrency assets. Thorswap lets you take control of your own assets as you choose.
As more chains onboard onto Thorswap there will be more ways to swap in and out of all kinds of native coins and tokens. This is the potential of Thorchain as a whole.
Conclusions
I live with one final example in regards to Thorswap pools and why they are extremely attractive to invest into.
The pool we will focus on is BTC : RUNE. All pools is some form of native token against RUNE. You would notice that the pools can be partaken as single sided where one can invest just RUNE or UST instead of a split 50 / 50. This will still yield the same earnings to the investors in terms of $ percentage. Therefore BTC pool currently is yielding 22%. Stake 100% of your BTC and you will get 122% of BTC in the value of $ at the end of one year.
Now if BTC prices rises significantly it is beneficial to have held the BTC in wallet rather than partaking in pool, however if BTC price remains flat or lower you would gain more BTC over the year of participating in the pool. What should be clear now is that when partaking in these pools you are actually earning the native token, no chain made up token or no RUNE if you did not put any RUNE into the pool. That is right! If you invested 100% into the pool when you withdraw from the pool it is only BTC that you will be withdrawing!
It goes the same for the remaining native tokens, such as Luna, ETH, BSB, and so on. Staked those in single sided you earn only that specific token's asset. Trading fees is what the investors of the pools earn from all the daily swaps. Since the protocol's cap has been removed there is a lot of potential for a lot more currency to flow through Thorswap.
None of what I write is financial advice. It is for entertainment purposes only. Thanks for reading!
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