On the 5th of December 2022, the THORChain info bot went on Twitter to announce more than $2.8 million worth of assets had been locked by savers.
💰 THORChain Savers
700 (↑ +17) savers | $2.7M (↑ +$64.4K)
Avg. APR is 8.07% (↓ -0.0233%)
Earned: $9,412 (↑ +$692.0)
Total filled: 31.6% pic.twitter.com/ZWB3yv4FVm
— THOR InfoBot (@THOR_InfoBot) December 5, 2022
THORChain allows users to swap assets seamlessly without needing to swap native tokens. When centralized exchanges and crypto projects have been under severe scrutiny, THORChain has allowed its users to access the same services centralized exchanges provide with minimal risk.
THORChain now offers an open-source, decentralized, and permissionless self-custody solution. This allows users to use their self-custody wallet to earn Bitcoin on their Bitcoin. That allows them to earn a yield on their assets without negative exposure to THORChain’s RUNE.
This was a service only available on centralized platforms, and it removed the risk of CEOs carrying customer funds and running to the Bahamas or buying houses for their parents. This service is called Saver’s Vault, and more than $2.9 million worth of assets have been locked in it.
Savers Vaults are a new way to supply single-asset liquidity on THORChain. Users can simply deposit native Bitcoin, earn in-kind yield, and withdraw their principal at any time since they maintain full control of their keys.
The liquidity pools on THORChain generate a yield from activities like swap fees and block rewards. When traders swap the assets they need using the THORChain platform, the fees are paid to liquidity providers. This means Savers will earn around half the yield of a typical RUNE liquidity pool.
The assets that can currently be used on the saver’s vault platform are layer 1 assets. Assets like BTC, ETH, and even DOGE.
These yield rates aren’t fixed but are calculated using an extract of past performance data from the last 30 days. Although it’s impossible to utilize past performance to predict future results perfectly. Swap fees, block rewards, and pool depth drive the yield. Annual percentage rates are thus calculated accordingly.
The saver’s vault is not eligible for people who want to leave their assets short term, but for long-term hodlers. Since all vaults are over-collateralized and nodes are selected randomly to man these vaults, the collateral of these nodes would be liquidated and used to cover losses.
Yet users are advised to research all projects properly they plan on interacting with, as no venture is risk-free. This would also be the beginning of decentralized projects offering services that were believed to be solely for centralized establishments.