Under the Hood: Checking THORChain’s Solvency

THORChain is unique as a crosschain liquidity protocol as it runs on multiple native blockchains. This enables laypersons to easily check and confirm that the assets in THORChain’s liquidity pools do in fact exist and are in the expected amounts, i.e. solvent.

Update 25-Nov-2022: A simple site to track THORChain’s proof-of-reserves has been created: https://veado.github.io/thorchain-proof-of-vaults/ . But read on below for steps to check manually.

Firstly, let’s check THORChain block explorers, for example https://viewblock.io/thorchain or https://thorchain.net/dashboard. We will be using Viewblock for the rest of this article.

On Viewblock, you can click on “Pools” (https://viewblock.io/thorchain/pools) to check the details of all the liquidity pools. We see that (at time of writing), the native BTC pool contains 9.12m RUNE and crucially, 655.2 BTC.

Diving in deeper, by clicking into the BTC.BTC pool, the “Providers” list all the depositors’ address which have contributed into the LP.

Note that the “Amount” here represent the pool “Units”, which one can check for your own individual deposits via https://thornode.ninerealms.com/thorchain/pool/BTC.BTC/liquidity_provider/*insertaddresshere*

The same total pool information can also be checked on this endpoint (in 1e8 notation): https://thornode.ninerealms.com/thorchain/pool/btc.btc

Here we see the same 655.2 BTC as the “balance_asset”, plus 3.8 BTC as the “pending_inbound_asset”.

Finally, let’s check for any scheduled outbound here: https://thornode.ninerealms.com/thorchain/queue/scheduled

Here we see 0.76 BTC scheduled to be sent out.

Therefore, the current total BTC that THORChain “owns” is 655.2 + 3.8 + 0.76 = 659.7 BTC.

But, where exactly is this 659.7 BTC?

Let’s now click on “Vaults” (https://viewblock.io/thorchain/vaults) to check the details of the Asgard Vaults (refresher: https://crypto-university.medium.com/under-the-hood-asgard-vaults-tss-and-node-churns-4767f3a5624b). There will be up to six Asgard Vaults, each controlling a share of all the external assets in THORChain.

Let’s click on one of them: https://viewblock.io/thorchain/address/thor1664sk3zrvkv0g5z2tc837kh3wrgd82raayht84. We can see that this Asgard Vault controls eight external blockchain addresses (plus one native RUNE address), corresponding to the eight external blockchain integrated to THORChain.

Zooming in to the BTC address, you can check on any BTC block explorer, e.g. https://www.blockchain.com/btc/address/bc1q664sk3zrvkv0g5z2tc837kh3wrgd82radesmk8, and you can see 204.7 BTC here.

Repeat this for the other four Asgard Vaults:

… and the total adds up to be… 664.0 BTC — THORChain is (over) solvent, vs the expected 659.7 BTC!

Note: this slight over-solvency was due to multiple minor discrepancies accumulated since THORChain was launched, and not expected to increase further.

This can be repeated for all the other chains and pools.

Note: smart contract ERC-20 and AVAX C-chain token pools are not stored in the Asgard Vault addresses, but instead on the respective Ethereum (https://etherscan.io/address/0xd37bbe5744d730a1d98d8dc97c42f0ca46ad7146) and Avalanche (https://snowtrace.io/address/0x8f66c4ae756bebc49ec8b81966dd8bba9f127549#code) routers.

Feel free to hop into the TC University Discord to chat about this, or any other THORChain questions that you may have.

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