THORSwap Earn Now Supports Stablecoins

THORChain launched a service called Savers Vaults in the last quarter of 2022 which enable users a permissionless option to earn yield on their native assets (L1) without price exposure to any other asset - meaning, no risk of impermanent loss.¹

Users can supply to any single-asset liquidity pools by depositing Layer 1 assets like Bitcoin (BTC), Ether (ETH), Binance Coin (BNB), Bitcoin Cash (BCH), Dogecoin (DOGE), Litecoin (LTC), Cosmos (ATOM) and Avalance (AVAX) and earn yields on them.

Yields are in the same kind of asset that users have deposited. For example, providing BTC will earn yield in BTC which is automatically added to user's balance. The Annual Percentage Rates (APRs) are not fixed (variable) because they are dependent on the swap fees, pool depths, block rewards, among others.

The service is accessible through various interfaces like XDefi Web, THORWallet (Mobile), ShapeShift, Edge Wallet (Mobile), and THORSwap Earn just to name a few. And most recently, THORSwap Earn added three stablecoins on its Savers Vaults.

Stablecoins Supported on THORSwap Earn

The following stablecoin have been added to the vaults:

• USDC (ERC20 and Avax)
• BUSD (BEP2)
• USDT (ERC20)

At the time of this writing, the APRs are quite high with USDC leading (over 70%) where 35% of the Vault cap has already been filled, and USDT at 35% APR (deposits at 15% of the vault cap). BUSD at just above 10%.

It is expected that the APRs will drop really soon as more liquidity gets added or provided so it is best to manage one's expectation.

Assets deposited on these single-asset liquidity pools can be withdrawn at any time since users control their own wallets. But it is worth noting that there are associated slippage fees (both when depositing and withdrawing).

Per my own experience, depending on the network (chain) and the amount being deposited or withdrawn, the slippage fee varies. It can be lower when the asset amount is smaller so when depositing larger amounts, it is better to check them out first and perhaps split them into one or two transactions. Of course, taking into account the network fees as well.

How to Deposit to the Savers Vault

• Go to THORSwap Earn, connect your preferred wallet.

  I'm using the XDEFI wallet (browser extension) for this example. It supports most of the chains.
  
  
  

• Choose the asset you want to deposit.

  Once again, I recommend checking the slippage fee and playing around with the amount you are comfortable with. In some networks, the fee can be negligible no matter the amount. Check the huge differences in the fees in the example below between depositing USDC on Avax network (more costly) and on Ethereum (slippage is a lot cheaper).
  

  The number of days with which you can recoup the slippage fee through the yield (break even) is indicated at the bottom of the deposit window and more detailed numbers including the network fee will be displayed on the next window before you confirm the transaction.

Risks

Assets deposited on the Savers Vaults are not exposed to impermanent loss as they are not paired with others. And while THORChain has its own layers of security, risks are not totally eliminated. Hence, it is advisable for users to take into account some associated risks like the following:

• Temporary Chain Halt

  As a security feature, THORChain can stop withdrawals from any blockchain temporarily when there are issues detected like "significant block lag on majority of validator nodes due to individual chain issues, automatic solvency checker, consensus failure, etc."²

  I personally experienced this some time ago when THORChain paused the withdrawals in the BCH network for a few weeks. The assets were there, but I just could not initiate any transaction, including depositing BCH into the vault.
  
  

• Slippage Fees on Depositing and Withdrawing

  As mentioned above, the slippage fees can vary so users must consider these when entering or exiting the vaults.
  
  

• Network Loss of Funds

  There's a possibility of losing funds when there's an exploit. While the likelihood of this happening on THORChain is low, it is still best to take it into consideration.

Personal Thoughts

THORSwap Earn is a more comfortable option for me to keep a few idle assets and earn APR.

Why so?

I get to keep my assets on their native blockchain (no wrapping needed). Also, I'm not exposing them to impermanent loss or any centralized control. In addition, I can withdraw them at any time (except when there's a chain halt).