Just like any AMM, LPs provide assets to the THORChain liquidity pools. They are compensated with swap fees and system rewards. Compensation is affected by a number of factors related to the pool and the state of the network.

Liquidity providers commit capital to pools which have exposure to underlying assets, thus liquidity providers gain exposure to those assets, which have free-floating market prices. While they are paid block rewards and liquidity fees, these are dynamic and may not be enough to cover "Impermanent Losses", which occur when price changes happen.

Depositing assets on THORChain is permissionless and non-custodial. Liquidity providers can propose new asset pools or add liquidity to existing pools. Anybody can propose a new asset by depositing it. See asset listing/delisting for details. Once a new asset pool is listed, anybody can add liquidity to it. In this sense, THORChain is permissionless. The ability to use and withdraw assets is completely non-custodial. Only the original depositor has the ability to withdraw them. Nodes are bound by rules of the network and cannot take control of user-deposited assets.

Pools of assets deposited by Liquidity providers, where each pool consists of 1 connected asset, for example Bitcoin, and THORChain's own asset, RUNE. They're called Continuous Liquidity Pools because RUNE, being in each pool, links all pools together in a single, continuous liquidity network.

Repositioning your Liquidity is a vital way to achieve optimized capital efficiency. Hence we will look into Active Thorchain LPs in this dashboard. thorchain.liquidity_actions table contains the required data for everything related to liquidity.

First let us figure out the most active LPs in Thorchain ecosystem.

Of the top 10 LPs, two LPs standout with quite alot of activity (almost 10 times) that of users below. These are :

• thor1hyarrh5hslcg3q5pgvl6mp6gmw92c4tpzdsjqg
• thor1ewelwta2zc0ycdzwhaj47aedxy3mkvnayenduf

Let us delve deeper into the activity of these two LPs in particular.

Both these LPs seem to be only focussing on ETH and BTC primarily with the stable coins, HOT being the only outlier. There seems to be a fairly huge volume of transactions. Could this be chasing APRs ?

With the APRs being fairly decent, with much more APRs available at more exotic pairs, this doesn't seem like a case of APR hunting. Moreover, spikes usually seem to happen together, with activity seeming to drive the APRs up.

Could this be just readjusting their exposure or compounding their rewards ? For this we can check the volume as asset moved.

From the graphs above, we can see that though the total volume of RUNE moves was high, the average RUNE moved per transaction and the maximum RUNE moved per transaction in a Day are very minimal. This suggests that these actions could more likely be recalibrating their positions or simply removing rewards and compounding.

To test this hypothesis out, lets check at the correlation between APR, TVL of the pool and the LP involvement.

From the above table, we can see except for HOT, none of the other pools have an significant correlation. This reinforces that these LPs weren't chasing higher APRs.