[TIP-014] Future of THORSwap & SwapKit

TL;DR:

Swapkit cannot even generate fees so long as it is tied to the THOR token, let alone share them with holders. However, the contributors want to reward THOR holders for their continued belief in the project and the resources contributed to SwapKit’s development. This TIP is intended to seek community approval for the contributors’ proposal to do so.

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Background

THORSwap is a community-centric DeFi project with a token ($THOR) that is used for fee sharing, governance over community token allocations, and trading discounts. THORSwap is a B2C product and targets DeFi users and enthusiasts.

SwapKit is a SaaS product that grew out of the THORSwap project but has a completely different target audience. SwapKit is a B2B product that targets major wallets, apps, and other institutional players. Over the course of working with and acquiring these customers, it became clear that these integrators are unable to work with a project like THORSwap that does not have a clear ownership structure or shares fees with token holders. Additionally, THORSwap competes directly with these integrators, creating a conflict that some integrators have been uncomfortable with.

The contributors of THORSwap and SwapKit understand that many THOR token holders are eager to benefit directly from SwapKit’s fees. We've dedicated significant effort to finding a solution that makes this possible. However, the reality is that if SwapKit were linked to or tied to the THOR token, it wouldn’t be able to form the necessary partnerships or generate revenue. In short, unless we fully separate the two projects, SwapKit’s value won’t benefit THOR holders—or anyone else—and will ultimately go to waste.

Barriers to Fee Generation

We’ve been lucky enough to secure preliminary integrations and partnerships with some significant players in the space, many of whom are publicly traded and subject to direct regulatory oversight, with very stringent compliance departments. Even setting aside legal risks for SwapKit or its contributors, our counterparties’ willingness to turn on the fee switch is contingent on our ability to demonstrate compliance, including ownership and funds-flow structures that account for all beneficiaries in a compliant way.

For example, we can’t KYC every THOR holder if they want to continue holding their tokens, which would be required to begin earning fees and sharing them directly with THOR holders.

Moving Forward

Rather than abandon the project, the contributors have worked to find a way for the community to either participate in SwapKit separately or receive a substantial benefit as a thank-you for their patience and belief. Although THOR holders have not historically governed the contributors' activities or development overall, we feel it’s important to ask the community for their approval of our plan to move forward.

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Proposal

We are proposing to do the following:

Reorganization

If this TIP passes:

• SwapKit’s IP and fee revenue will be fully owned by SwapKit, Inc., and separated from the THORSwap project & THOR token.
• Future SwapKit development costs will be funded by SwapKit, Inc.
• This will reduce THORSwap’s interface upkeep and infrastructure costs, enabling more resources to be focused on improving the THORSwap product.
• All THORSwap revenue will continue to be split between the treasury and vTHOR at the historical rate of 25/75.
• THORSwap will continue as a premier cross-chain interface, with all generated fees going directly to the development and sustainability of THORSwap.

Ultimately, the teams and management of THORSwap & SwapKit will be separated entirely. This will be done carefully, ensuring THORSwap continues to have a dedicated vision and support.

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Benefits to THOR Holders

1. Equity in SwapKit Inc.

THOR holders can receive a percentage of equity in SwapKit Inc. relative to their THOR position. The terms are:

• 30-day window to file your claim.
• Must hold >= 250,000 THOR (or vTHOR equivalent).
• Snapshot will be taken as of TIP posting (or momentarily before).
• LP positions in THORChain or Sushi pool qualify.
• 50% conversion rate (2% of current THOR supply = 1% of SwapKit equity).
• Must pass KYC & AML screening to comply with laws.
• Must be an accredited investor and meet local requirements.
• Same class of shares as contributors, currently illiquid.
• Must agree not to sell or move THOR for 90 days.

2. $6M in Compensation

Primarily benefiting those not eligible for SK equity:

• ~$4M in RUNE will be donated to the THOR/RUNE LP in equal daily tranches over 90 days
• This will increase liquidity and provide direct rewards for the community.
• This will consist of 400K RUNE from the treasury + all remaining treasury LP positions (~175K RUNE & ~314 ETH).
• ~$2M in THOR from circulating supply will be airdropped to current vTHOR holders over 90 days.
• SK equity holders, including the team, will be prevented from selling during this period.

3. Improved Tokenomics

• ~30% of remaining THOR supply will be burned.
  • Burn the entire remaining community incentive pool (~104M THOR).
  • Burn unallocated team vesting tokens (~20M THOR).
• Consolidate LP positions from Sushi and redeposit to THORChain.
  • RUNE side will be donated to the THORChain Pool.
  • THOR side will be placed into the airdrop contract.
• SushiSwap Pool:
  • ETH side will be swapped to RUNE & donated to the TC Pool.
  • THOR side will be placed into the airdrop contract.