Introducing: Streaming Swaps — A DeFi Game-Changer! 🌊
Enhancing DeFi Trading Efficiency and Flexibility through Swap Optimization 🔀
It’s finally here! Today, THORSwap is thrilled to introduce a truly revolutionary feature for DeFi users: THORChain Streaming Swaps!
This exciting innovation is a strong testament to THORSwap’s core commitment to providing users with the best permissionless cross-chain trading experience possible. Let’s dive into what Streaming Swaps are and why they are such a game-changer 🔥
Background
THORChain operates using a slip-based fee model for its liquidity pools. This means that the trade execution fee is influenced by the swap size and pool depths.
Before Streaming Swaps, traders could achieve lower slippage for larger trades by manually dividing them into numerous smaller swaps. The downside? This method resulted in multiple individual on-chain inbound and outbound transactions. Consequently, traders faced a surge in on-chain gas fees and a tedious manual process.
Introducing Streaming Swaps
Streaming Swaps streamline this process to ensure maximum capital efficiency. Users only need to send a single inbound transaction. Internally, THORChain divides the swap into several sub-swaps executed over time, consolidating them into a single outbound transaction to the chosen wallet.
This helps to reduce price slippage by allowing arbitrageurs to rebalance the pool intra-swap and reduce the swap size vs the pool depth.
Imagine sipping a drink slowly to savor it instead of gulping it all down in one go. By taking your time, you often get a better overall experience. Similarly, by being more patient with your swaps, you can achieve better price execution (optimal rate/lower slippage).
For a deep dive into the technical background of Streaming Swaps, check out THORChain Dev Docs.
Price Optimized vs. Time Optimized: You Choose!
With Streaming Swaps, THORSwap users now have two choices:
Optimize for time ⏳
If you want your swap executed faster, you can choose the regular THORChain swap method, where swaps are only limited by each native network’s transaction speed.
Optimize for price 💰
Using Streaming Swaps, trades can be broken down into a number of sub swaps, allowing for potentially a more favorable average price.
With the introduction of Streaming Swaps, THORSwap now offers a balance between getting the best price and saving time, putting the decision-making power directly in the hands of the user.
At launch, Streaming Swaps will split a Price Optimized swap automatically depending on Swap Size.
In future updates, THORSwap will introduce further customization options, allowing users to adjust swap intervals and specify the number of sub-swaps. It is important to note that this feature doesn’t change the fact that THORSwap never has custody of your assets. During the execution, your assets are held in the THORChain vaults, secured by an overbonded network of node operators. You can read more on THORChain vaults here.
Frequently Asked Questions
For Swappers
Q: Are there any risks with Streaming Swaps?
A: Streaming Swaps are exposed to market volatility during their streaming period.
Q: Is there any price protection?
A: No, Streaming Swaps execute at market rate. Your swap is temporarily exposed (positive and negative) in a limited way to market volatility.
Q: What if the price target can’t be met due to market volatility?
A: The network would issue a partial refund for all sub-swaps that could not meet the price target.
Q: Can I cancel a Streaming Swap once I’ve initiated it?
A: Currently, Streaming Swaps V1 cannot be canceled. Once the transaction starts, the process will complete.
Impact on THORChain
Q: Why introduce Streaming Swaps to THORChain?
A: It’s an experiment aimed at attracting new users, liquidity, and volume. The goal is to outperform Centralized Exchanges (CEX) in speed, privacy and price execution.
Q: How will Streaming Swaps affect fees and Liquidity Providers?
A: Fees paid to LPers per dollar swapped will reduce, especially for larger swaps. However, this could be balanced by increased volume due to more attractive pricing for swappers.
Q: What’s the expected impact on shallower pools?
A: Streaming Swaps should make shallower pools, like AVAX, ATOM, AVAX.USDC, etc., more viable and drive volume due to competitive pricing.
Q: Does this feature bring external volume into THORChain?
A: Yes, it introduces volume that would usually be outside THORChain, through DEX Aggregation, into the THORChain ecosystem.
Q: Can the efficiency of Streaming Swaps be adjusted?
A: Yes, there’s a THORChain protocol-controlled setting to increase/decrease the efficiency of the feature, ensuring long-term health for the protocol.
Future Use and Additional Information
Q: Are there any time limits for L1 swaps?
A: Currently, Streaming Swaps of Layer 1 assets (BTC, ETH, etc.) can only take place over a 24 hour period to maintain economic security.
Streaming Swaps of native THORChain assets can take place up to a period of 1 year. This includes RUNE and synthetic assets.
These limits may be removed in the future, enabling the creation of DCA and TWAP products using this feature.
Q: Who benefits the most from Streaming Swaps?
A: While available for all trade sizes, larger trades (relative to pool depth) stand to benefit the most.
Q: Will future versions allow for cancellations?
A: Yes, the plan for V2 is to have the capability to cancel long-lasting streaming swaps.
Q: Are Streaming Swaps compatible with other THORChain/THORSwap features?
A: Absolutely! It’s compatible with features like Cross-chain Transaction Tracker, THORName and more.
It is also slated to be included in SwapKit — THORSwap’s suite of API/SDK cross-chain services.
Conclusion
Whether you’re looking to execute the fastest trade possible, or simply a long-term holder aiming for the best price — the power of choice is yours. By removing barriers for large swaps, Streaming Swaps ensures Capital Efficiency for trades of all sizes.
This level of empowerment & flexibility aligns with THORSwap’s vision of a truly decentralized, user-centric platform. A huge shout out to the builders who made Streaming Swaps possible and the incredible community for their continued unwavering support. Get ready to redefine your cross-chain swap experience!
Happy Swapping! 🚀
About THORSwap
THORSwap is the leading multi-chain decentralized exchange (DEX) aggregator powered by THORChain. Perform cross-chain swaps in a permissionless, trustless, and non-custodial manner.
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