Savers (Deprecated)
[DEPRECATED] THORFi Savings - Single-sided asset exposure using Synthetics
DEPRECATED FEATURE: Savers have been permanently deprecated as of January 4, 2025. This feature is no longer available on THORChain. This documentation is preserved for historical reference only.
See the THORFi Unwind announcement for more information.
Overview
Users could gain yield with single sided asset exposure using Synthetics. See the PR here and article here.
The User would mint a Synthetic asset - an asset that retained 1:1 purchase rights on the underlying L1 asset. Then the User would lock this synthetic asset in a Savings vault, and they were issued Saver Units - units that tracked their ownership of the total vault balance. The protocol monitored the yield the underlying Synth liquidity was earning, and paid that yield directly into the vault. The user could then reclaim their principle and earnings at any point later.
Synth Yield
Savers took on significantly less risk than an LP; therefore, they earned a proportion of the yield generated by the synth collateral, with the rest captured by the LP.
Savers Yield was dynamic, depending on the system utilisation. The higher the synths utilisation in the pool, the lower the Savers Yield would be.
Savers Yield was calculated as:
MaxSynthsForSaversYield = 60%, set by MaxSynthsForSaversYield
SynthYieldBasisPoints = 80%, set by SynthYieldBasisPoints
Synths Per Pool = Synth Utilisation in the pool
Every time a swap was made in the L1 pool, the fees and rewards that were meant to be added to the pool were divided against the Synth Yield Basis Points, then divided against the depth of the Savers' Vault vs. the Depth of the Pool (in terms of asset quantity), then paid directly into the vault.
Withdrawing
At any point, the Saver could re-claim their share of the vault, which would be their principle, plus all the yield they were entitled to. The asset being claimed was a synth quantity, which was then swapped out to the L1 asset.
Historical Questions
Where did the yield come from?
Swap fees and liquidity rewards.
Was Saver holding an L1 asset, or a claim on an L1 asset?
The Saver held Saver Units, which was a claim on a Vault Balance, which held Synthetic Assets, which was a claim on L1 Liquidity, which could be swapped at 1:1 purchasing power to the L1 Asset. So, they were holding a claim on an L1 asset.
What were the risks?
There could be an economic bug in Synths, leading to breakdown in the accounting of the claims. There could be a technical bug leading to a loss of L1 assets in the vaults.
Why were there fees to enter or exit?
Savers paid a liquidity fee to enter and exit, as well as network fees to pay for gas. Liquidity fees were demand-responsive and prevented economic attacks. Network fees to pay for gas ensured the system was sustainable.
Resources
Savers Vaults Live on THORChain - THORChain Medium
Under the Hood: Single Sided Yield & Protocol Owned Liquidity - LP University
Yield Bearing Synths and POL - GrassRoots Crypto
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