THORSwap is revolutionizing DeFi Space with THORChain Streaming Swaps

In a major move to reshape the decentralized finance (DeFi) landscape, THORSwap, a leading decentralized exchange (DEX), has announced the introduction of what they call “a new revolutionary feature”: THORChain streaming swaps. According to the release, this new functionality is designed to significantly improve the permissionless cross-chain trading experience for users, a commitment that THORSwap has steadfastly kept since its inception.

THORSwap’s background and need for streaming swaps

substantiation THOR Swap is THORChain’s operating protocol, which uses a slip-based fee model for its liquidity pools. In this model, the execution fee is directly affected by swap size and pool depths. Traders previously had to manually split their large trades into several smaller swaps to achieve less slippage. While this method was effective, it led to an increase in on-chain gas fees and introduced a cumbersome manual process.

The rise of streaming swaps

THORSwap’s newly introduced Streaming Swaps has streamlined this painstaking process to ensure maximum capital efficiency. Users only need to send one inbound transaction. Internally, THORChain then splits this swap into several sub-swaps executed over time, consolidating them into one outgoing transaction that is routed to the chosen wallet. This innovative approach helps reduce price shifts by allowing arbitrageurs to rebalance the pool within the swap and reduce the swap size relative to the pool depth.

Streaming Swaps: The User Experience

Imagine enjoying a drink slowly rather than consuming it in one gulp – the experience is often richer and more satisfying. A similar principle applies to swaps on THORSwap. By being patient and using Streaming Swaps, users can ensure better price execution, optimal rate and less slippage.

Price Optimized vs. Time Optimized: The Power of Choice

According to the announcement, Streaming Swaps has opened up two avenues for THORSwap users

1. they can optimize for time by using the regular THORChain swap method, which works at the transaction speed of any native network, or
2. they can optimize for price by using Streaming Swaps.

The latter method splits trades into multiple sub-swaps, potentially yielding a more favorable average price.

Empowering users with customization and security

At launch, Streaming Swaps will automatically split a price-optimized swap depending on the swap size. In future updates, THORSwap plans to roll out additional customization options, allowing users to customize swap intervals and determine the number of sub-swaps. Crucially, despite these new features, THORSwap will not hold users’ assets during execution. Instead, these assets remain safe in THORChain vaults, overseen by a wired network of node operators.

THORSwap: a short summary

Founded by a team of globally distributed pseudonymous developers, THORSwap is a non-custodial, multi-chain DEX. Launched in April 2021, it facilitates swaps for native assets across a range of blockchains, including Bitcoin, Ethereum, Bitcoin Cash, Litecoin, and Binance Smart Chain. It does this without relying on wrapped tokens or bridges connecting different chains, a unique capability that has increased its appeal among users.

The bright future for THORSwap

Amid fluctuating market conditions, THORSwap has shown impressive resilience. Organic fee income, which now makes up 44% of node revenue (up from about 5% last year), points to the economic sustainability of the platform. The number of unique addresses performing swaps on THORChain is also steadily increasing, with over 66,000 users expected this month.

THORSwap has made significant strides with integrations such as TrustWallet and Ledger Live, allowing the platform to tap into their user base. In a recent development, OKX Wallet, a leading Web3 wallet company, announced the integration with THORSwap. The fact that more and more DeFi wallets are integrating with THORChain is great news for both the ecosystem and users who want to securely exchange assets across the chain at a low cost.

Despite a drop in total value from a peak of $1.39 billion in April 2022 to $167.5 million today, THORSwap remains committed to innovation and delivering value to its users, reaffirming its mission to push the boundaries of DeFi to continue to push.

Questions and answers about the new streaming swaps features are available at the THORSwap blog post.

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