THORChain's Restart Is Days Away: Dynamic Fees, Rev-Share, and Protocol-Owned Liquidity

THORSday Community Podcast #209 ft. CBarraford, KentonC137 & Patriotsounds | June 18, 2026 | Watch the full episode on YouTube

By Raynalytics

TL;DR

• The restart is close. With v3.19.1 fully adopted and Gaia unhalted mid-show, Chad expects to enable signing and churn within roughly a day, with trading potentially back by "Mondayish."
• Three growth levers are lined up for after the restart: a dynamic fee model (ADR-27), a SwapKit rev-share that could multiply volume, and a sustainable free stable-to-stable swap design.
• The big governance push is Protocol-Owned Liquidity. Kenton wants at least 25% of fees routed to POL to rebuild pool depth, while Chad frames the right number as market-dependent.
• Monero now works end-to-end on the test environment. Chad targets a live $XMR launch roughly a month after trading resumes, with Zcash ($ZEC) one to two weeks behind.
• An audience question on "$RUNE is just a governance token" got a full rebuttal: $RUNE is everything except a governance token.

1. The Restart Is Close: Steps to Resume Trading

The update everyone tuned in for: THORChain is closing in on resuming trading after more than a month offline.

Chad confirmed that v3.19.1 shipped late the prior night and all nodes have finally updated. The release bundled two things: patches to the KeyVerify process, and a fix for a Gaia (Cosmos Hub) bug the team wanted to patch before bringing those nodes back to the chain tip.

KeyVerify is the one-time vault verification step for this specific recovery. Of the six vaults, two were formally verified safe (the compromised vault does not need checking), with a few more pending on nodes that were slow to come online. Chad was candid that he never expected the process to work perfectly on the first attempt, and that the team already has roughly 99.9% certainty the vaults are good through other methods. KeyVerify will be disabled via a Bifrost config change once the churn completes and the old vaults are gone.

"Hopefully by Mondayish, we'll be trading again." (Chad)

The remaining sequence: let Gaia catch back up to the tip (Gaia was unhalted live during the show, sitting ~42,000 blocks behind and closing fast), enable signing and churn, run keygen and the churn itself, then re-enable secured assets, trade assets, LP actions, and trading. Secured assets get priority since arbitrageurs need them to bring pool prices back in line. Churn timing is the wild card: usually hours, occasionally days.

Denny and the team also leaned into a theme: this slowness is the cost of decentralization. A single node operator sitting on three un-updated nodes held up the whole network, which Kenton noted is exactly what proves THORChain is not controlled by any one party. Chad also credited AI as a major accelerant for the recovery work, calling it the difference between a fast fix and doing everything by hand.

2. Three Growth Levers: Dynamic Fees, Rev-Share, and Free Stablecoin Swaps

Once trading is back, Chad wants to push three features he sees as potential volume multipliers.

Dynamic fee model (ADR-27). This adjusts fees per THORName to find the most competitive price for partners that compete purely on price. It applies only to specific, trusted THORNames rather than all of them, which prevents someone from spinning up a THORName to wash-trade their way to artificially cheap fees. The proposal sits at roughly 30% of the node vote; Chad plans to push for the rest once the network is back, then test with Symbiosis first (around $300M/month in volume, of which THORChain currently captures only ~1%). On how to tune it, Chad said he would start simple and iterate on real data, and that he wants to pull in Ray (Raynalytics) to help graph the raw numbers and make sense of the math before piping anything into AI.

JP has been pushing, through back channels, to apply dynamic fees to non-affiliate trades too. Chad isn't convinced the no-affiliate data would be meaningful signal rather than noise, but is open to testing it later.

SwapKit rev-share. Already shipped in v3.19 and awaiting a vote, this lets SwapKit take the rev-share THORChain pays them (some 20-30%) and use it to discount trades at the affiliate layer, beating their competitors like Near and Chainflip and winning more volume, which by requirement routes through THORChain. SwapKit is THORChain's largest affiliate by volume, yet THORChain reportedly sees only 4-5% of their total flow today.

"It could be that feature alone with just SwapKit could be a multiplier of our volume." (Chad)

Free stable-to-stable swaps. Chad contrasted his design with SUI, which made stablecoin swaps fully free and did ~$65B in volume in five days (versus THORChain's ~$125B cumulative since 2021) but is subsidizing every trade unsustainably, which Chad called more a marketing ploy than a fundamental change. His design, posted as a GitLab issue, aims to be net-neutral to the protocol while driving more non-stable volume (Bitcoin, Ethereum) through new integrations, especially point-of-sale and payments wallets. Note these are proposed and in-design, not live.

On the onboarding side, Chad and Randy soft-launched a new self-serve affiliate page where integrators can register for an API key, manage their THORName and fee, pick their payout token, and track earnings, with auto-generated widget code planned. It is in alpha (Chad wouldn't send a new partner to it just yet), and the team is weighing whether the API should be permissioned. Chad leans permissioned to keep a real relationship with each partner and cut spam, while stressing that THORChain integration itself stays permissionless: anyone can still tie in without the API. Partners can register interest via THORChain's integration page.

3. Protocol-Owned Liquidity: Rebalancing the Incentive Pendulum

The governance centerpiece was Protocol-Owned Liquidity (POL). Since the hard cap was removed, the incentive pendulum has been routing fees toward nodes rather than pools, so liquidity providers earn little and pools stagnate or shrink. Rather than re-incentivize mercenary LP capital, the proposal is for the protocol to keep those fees and deposit them into the pools itself, owning liquidity that never withdraws.

"This is liquidity in the pool that will never be withdrawn. It is there forever, owned by the protocol, which I really like." (Kenton)

Kenton argued for at least 25% to POL (versus the 7.5% POL / 2.5% burn floated in the recovery ADR), reasoning that deeper pools mean more arbitrage, more volume, and more fees in a compounding loop. Chad saw it in more gray: 25-30% is probably right today (roughly $250-300k/month at current revenue), but might be too much in a bull market generating millions, at which point nodes could vote it back down.

There was a candid philosophical thread on whether to keep incentivizing LPs at all. Denny, now a bond provider himself, favors a POL-only model as simpler and more predictable; Chad pointed to TCB having long argued that LPs in crypto rarely make money, with most AMM profits accruing to a small set of bot operators. The counter-argument, raised by Kenton: if you want LPs to stay rather than yank their capital the moment they break even, you have to give them a yield. Several legacy LPs are still underwater on synth-leveraged positions and likely to withdraw the instant they recover.

Both agreed the protocol already owns most of the ~$50M in current liquidity, and that THORChain's capital efficiency (a $32M Bitcoin trade, described as the biggest in DeFi history, on relatively shallow pools) means it needs far less liquidity than it once thought. The open question Chad raised: where does deep liquidity for new pools like Monero come from, if not POL?

4. Monero Works, and Huginn Audited Serai

Privacy remains the north star, and there was real progress. Chad confirmed Monero now works end-to-end on the chainet test environment: real $XMR swaps, liquidity adds and removes, and churns, with ring signatures and the eight-byte memo complexity handled.

"It actually works... real layer 1 to layer 1 swaps in and out of $XMR, permissionless, no KYC, decentralized, and it is repeatable." (Chad)

He targets a live launch roughly a month after trading resumes, assuming no major bugs forcing a v3.20 change, with Zcash ($ZEC) landing one to two weeks after that. Behind the scenes, Chad pointed Huginn, his AI audit agent, at Luke Parker's Serai codebase; the audit ran for weeks and surfaced almost 500 issues, about 18 of them P0, now being patched and reported upstream to Luke. The broader privacy ambition is to add them all over time, with Quai Network, Nano, Zano, and Firo all in the mix as targets.

5. What Actually Gives $RUNE Value

An audience member argued $RUNE looks like nothing more than a governance token. Chad flipped it completely.

"RUNE is everything except a governance token." (Chad)

The breakdown: you cannot vote with $RUNE by holding it. Governance is one-vote-per-node, and running a node means bonding upwards of a million $RUNE, so governance is a byproduct, not the point. The real utility is that nodes and bonders earn yield from real swap fees (paid in $RUNE, deducted from swaps so traders never need to hold it), and every liquidity pool is paired 50/50 with $RUNE, giving the token a baseline floor of value tied to the assets in the pools. Chad's framing: unlike "99.99% of crypto," THORChain literally cannot function without its token. The team kept it educational, declining the audience member's follow-up to give any investment case.

Kenton and Chad tied this to why they think THORChain is "actually real," generating genuine revenue from real users rather than minting tokens, which Chad put among the top-10 revenue-generating protocols, with no third-party oracle or centralized dependency.

6. Tokenized Stocks and the Permissionless Endgame

A lighter, forward-looking riff: Coinbase's move to put stock trading on-chain. The team assumed it would be KYC'd (Chad recalled Mirror Protocol getting served for offering tokenized Tesla and SpaceX exposure), but spun out an interesting game-theory point. If a company wants its stock available to the most buyers with 24-hour trading, issuers themselves may eventually pressure regulators to push securities into permissionless venues, rather than dragging crypto into permissioned ones. THORChain, as neutral infrastructure, can pool any tokenized asset that lives on a supported chain. As Denny put it, the most crypto-friendly jurisdictions will attract the most capital.

7. Maya Protocol and the Road Ahead

Chad gave a warm update on the core dev partnership with Maya Protocol, who stepped in after Nine Realms and have, in his words, kept the lights on while freeing him to focus on roadmap and BD work alongside Randy.

"The joke has been Maya Protocol is THORChain's hot Mexican girlfriend. Sounds like we popped the question, we're engaged, and we're going to make a lot of babies." (Chad)

Two post-mortems are coming: a technical one from Soda Labs and a more human-readable one from Lemur Labs, targeted for within a week or two of trading resuming. The episode closed on a teaser: Chad will walk through a recent attempted social-engineering attack on him (suspected, unconfirmed, North Korea) next week as a community PSA.

What to Watch

• The churn. Once Gaia hits the tip, signing and churn get enabled; trading could follow within days. Churn duration is the variable.
• ADR-27 dynamic fee vote. Chad will push for the remaining votes, then test with Symbiosis first.
• SwapKit rev-share vote and free stable-swap proposal. Both are coming to the community in the next few weeks.
• POL percentage. The 25-30% debate isn't settled; watch for the node vote.
• $XMR and $ZEC. Monero ~1 month after restart, Zcash 1-2 weeks after that, barring bugs.
• The post-mortems and next week's security PSA.

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