Introduction
Following the expiration of the first collaboration period based on ADR020 and following discussions that began with ADR027 about a fee parameter, the Rujira team asked nodes to vote on the path forward for the THORChain x Rujira cooperation and to confirm long-term alignment between the two. Nodes were asked to choose between three options for the future of the relationship. Following community discussion and a node vote, Option 1 “ confirming and reinforcing the cooperation” was selected.
How the Collaboration Works Today
Under the arrangement set out in ADR020 , THORChain and Rujira have operated under an exclusivity agreement for one year. The goal of this first year was to evaluate the contribution of each of the two parties and the overall synergies.
THORChain provided base layer security and infrastructure: the Asgard vaults that hold native assets and Secured Assets, Bifrost for secured asset deposits and withdrawals, compute, enshrined oracles, and the onchain scheduler.
Rujira built the App Layer products that run on that infrastructure, including an orderbook DEX, automated market-making strategies, lending and borrowing, and $bRUNE. Revenue generated by the App Layer has been split evenly between THORChain and Rujira.
After this first year, Rujira team brought three options to a vote:
Option 1 - confirm and reinforce the cooperation. Keep the exclusivity arrangement, redirect a share of App Layer revenue to a new protocol-owned liquidity fund, and set WasmArbSlipMinBps to 0 to reduce friction between the Base Layer and App Layer.
Option 2 - limited cooperation. Treat Rujira as one of many THORChain users rather than an extension of THORChain, open the App Layer to other teams, reduce THORChain's revenue share, keep WasmArbSlipMinBps at the same level as TradeAccountsSlipMinBps, and remove any special protection for Secured Assets.
Option 3 - discontinue the App Layer on THORChain. The App Layer would no longer be part of THORChain's roadmap. Rujira would continue building its products and pursuing its vision elsewhere.
Nodes voted to adopt Option 1, continuing and extending the arrangement first established under ADR020. Let's get into the details of what it means.
Details of Option 1: “Confirm and Reinforce the Cooperation”
ADR031 is essentially a continuation of ADR020 so the key roles remain the same, with THORChain providing Base Layer security and infrastructure and Rujira building the App Layer on top of it. However, a few important elements are introduced or changed:
WasmArbSlipMinBps
The Virtualization Strategy (VS) is the bridge between the Base and App Layer liquidity. When a user swaps on the App Layer, the VS briefly borrows the asset needed from RUJI Lending to fill the order right away, then settles the trade on the Base Layer at the end of the block, repays the loan, and shares any profit with LPs and RUJI stakers.
WasmArbSlipMinBps sets the minimum slip fee charged on that Base Layer settlement leg. Setting it to 0 (down from the standard SecuredAssetSlipMinBps) lets the VS settle smaller trades more often, since it no longer has to clear a higher fee floor each time. This keeps quotes on both sides closer to the real market price and captures arbitrage that would otherwise go to external traders, while also pushing more volume (and higher APRs) through concentrated liquidity positions, which eventually attracts more liquidity providers. Note that external arbitrageurs are still needed once App Layer liquidity runs out.
The change will be monitored via the KPIs below rather than revisited on a fixed schedule.
Revenue Share and the Rujira POL Fund
A share of Rujira's revenue now builds App Layer protocol-owned liquidity (POL):
- 33.34% to Rujira POL, held in a POL Fund 50/50 owned by Rujira and THORChain.
- 33.33% to THORChain.
- 33.33% to RUJI stakers, all single-sided (the planned RUJI/RUNE LP staking program was dropped).
Since the Fund is split evenly, THORChain's total economic share (direct plus half the POL, comes to 50%) matching Rujira's. The Fund runs as a DAO DAO under a 3-of-6 multisig (Hans, PM, Zefiro, Chad, Aaluxx, Slambammer), with PM leading capital allocation. It both bootstraps App Layer liquidity and acts as a buffer to absorb smart contract exploit losses.
Responsibilities in Future Exploits
Responsibility for potential user losses depends on where an incident originates:
Smart contract exploits are Rujira's responsibility. THORChain isn't expected to contribute, though nodes are expected to contain the incident via Mimir settings like HaltSecuredWithdraw or HaltSigning. A planned buffer system will also auto-pause large Secured Asset withdrawals, giving time to investigate before three nodes vote to resume them.
Base Layer exploits affecting Secured Asset backing are THORChain's responsibility, in exchange for its App Layer revenue share. Secured Asset holders rank senior to POL and nodes, and THORChain aims to make users whole where reasonable. Any POL used is capped at 20% of its remaining value at the time of the exploit; if that cap is hit, actively deployed Secured Assets are prioritized over idle ones.
These are guidelines, not a fixed formula, actual compensation is assessed case by case. THORChain also plans to raise the share of system income going to POL over time (20-30% target) to rebuild this buffer.
Collaboration on Development and Marketing
THORChain and Rujira's development teams will continue working on initiatives that benefit both sides, such as making the Virtualization Strategy aware of the swap queue so it can act as a counterparty to rapid swaps, and enabling the THORChain router to tap App Layer liquidity directly. On the marketing and business development side, the two teams will continue presenting THORChain and Rujira as a single, united front rather than as separate user bases.
Clear KPIs to Ensure Alignment Is Fine
Because the Base Layer and App Layer are closely interconnected, there is no clean way to A/B test the effect of WasmArbSlipMinBps. It is also important to ensure Rujira actually boosts THORChain activity and revenue. For this purpose, several dashboards will track the health of the system directionally:
- THORChain's total gross system income, broken down to show how much comes from Rujira's revenue share.
- Virtualization Strategy volume as a percentage of THORChain's total volume.
- THORChain's gross system income per $1bn of total crypto exchange volume, to adjust for broader market conditions.
- THORChain's volume market share relative to its main competitors.
- Execution quality, in particular the deviation between Base Layer pool prices and oracle prices.
Two patterns will be worth observing. First, total gross system income, assessed on a market-adjusted basis, is the primary signal: if it trends up relative to the broader market, the system is moving in the right direction. Second, a divergence where THORChain's total income trends down while both Rujira's share and Rujira's absolute dollar contribution trend up would not prove cannibalization on its own, but would warrant a closer look at WasmArbSlipMinBps.
These KPIs will be reviewed over a sufficiently long period to avoid reacting to short-term volatility, with the first meaningful review expected once the Virtualization Strategy has been upgraded, Dynamic Concentrated Liquidity has launched, and enough data has accumulated.
Conclusion
With Option 1 adopted, THORChain and Rujira remain long-term partners, now under an updated revenue split, a new App Layer POL fund, and a clearer framework for handling future exploits. Dev and marketing teams will work more closely together, and new KPIs are now in place.
Altogether, we can expect bright months ahead that will make the omnichain solution even more powerful, in a world where centralized solutions are still proving to lack efficiency.
