Introduction

THOR Synthetic Assets

Synthetic Assets (“Synths”) are a collateralized representation of an asset on THORChain. These derivatives of cryptocurrencies such as Bitcoin, Ethereum, etc will always have the same value as the original asset.

Unlike Wrapped Assets, THORChain Synths are backed by THORChain Liquidity Pools, which contain 50% of the original asset and 50% $RUNE. THORChain Liquidity Pools ensure that the synth price always remains 1:1 with the native token price. Collateralization via pool ownership ensures always-on liquidity and pricing. In short, there is always a direct correlation between the Synth and the Assets which are being secured.

Each minted Synth represents the LP ownership of the native asset. Essentially, 50% of the native asset will be sold to purchase $RUNE, while the pool maintains a 1:1 price correlation. Synth transactions is expected to increase THORChain TVL and open the gate to many future THORFi features.

Mints and Burns

When swapping RUNE for a Synth in its synthetic liquidity pool, an equivalent amount of the Synth will be minted.

When swapping a Synth for RUNE in its synthetic liquidity pool, the Synth will be forever burnt and the equivalent amount of RUNE can be redeemed. Since Synths Assets are paired with real Assets, the RUNE can be directly swapped for the underlying real asset.

Source

Methodology

Two CTE are created to gather the data referred to mints and to burns respectively following this structure:

• from_asset as mint_asset / to_asset as burn_asset
• count(distinct) as number of mints/burns
• sum(to_amount) as volume in RUNE for each transaction
• sum(liq_fee_rune) as mint/burn fees in RUNE

Note that since the swap is done always with RUNE, there is no need to add this information. The amount of swapped to RUNE is used to calculate mint volume and the swapped from RUNE as the burn volume.

To identify these transactions, a where from_asset like '%/%' / where to_asset like '%/%' constraint is used.

Both CTE are joined on the condition m.mint_asset = b.burn_asset to show the final results. These will aggregate number of transactions, RUNE volume and fee volume by chain and by asset, and calculate net amounts as mints - burns for volume and swaps. Mint fees and burn fees will be added to obtain total fees.

Results

The analysis will calculate the net synth amounts as mint - burns, both as RUNE amount and number of swaps. Negative RUNE amount means that more Synth assets have been swapped to RUNE while Positive RUNE amount means that more RUNE has been swapped to Synth asset. In case of swaps, positive swaps mean more Synth mints and negative swaps mean more Synth burns, a.k.a. RUNE redemption.

Figures 1. and 2. show the Net Synth volume in RUNE per chain and per chain and asset respectively.

Binance Smart Chain takes the lead as the chain with the most volume, almost 3 times bigger than ETH. Both chains are burning the synths for RUNE.

In Binance Smart Chain, most burned assets are BUSD and BTCB (wraped BEP-20 token of BTC).

In Ethereum, most burned assets are USDC and ETH (both native), followed by THOR and WBTC (wrapped ERC-20 tokens of RUNE and BTC).

Figure 3. shows the net synth volume by asset and by chain. The idea was to visualize representations of same tokens in different chain together and compare them with single-chain tokens.

BUSD is the leading synth with 550k RUNE volume burnt, followed by BTC(native, BEP-20 and ERC-20 token) with around 95k and by ETH (native and BEP-20 token) with around 75k RUNE volume burnt respectively.

Figure 3. shows the net number of swaps by chain. The clear dominance goes to Bitcoin with 6500 synth mints, followed by Terra with 2011 synth mints. Ethereum on the other hand has The rest of the asset 1331 synth burns.

Figure 4. shows the net number of swaps by asset. Similarly, BTC (native) and UST take over as leading synth assets minted while Ethereum's activity is distributed through its different assets, between 500 mints and 500 burns.

Figure 7. shows the total volume in fees by chain. Binance Smart Chain has the most fee volume with 30k RUNE followed by Ethereum with 23k and Terra with 13,5k.

In Figure 8. this total fee volume is compared to net synth volume in a normalized plot. It means that Bitcoin and Terra have the biggest fee-to-swapped volume. In case of Terra, fees account to almost 50% of the net burnt volume while for Bitcoin, fees volume is 6 times bigger than net synth mints.

Conclusion

All chains are burning more synth asset volume except for Bitcoin. BTC is the only major asset with positive net volumes (the other one being TWT).

This means users are as a whole redeeming more RUNE against other assets from different chain.

Binance Smart Chain is the leading chain before Ethereum - it is a sign that BSC has found better sinergy with THORChain and could be positive sign for both chains.

Disclaimer: since the bounty doesn't mention explicitly an analysis of net synth amounts over time, I added all mints - burns with no time constraint. It is somehow more difficult for me to come to conclusions without the time frame, but it gives some very interesting insights as well.