THORChain's 'DEX Aggregation' is a unique approach to decentralized exchange of assets. It allows users to swap all assets supported by THORChain, including native Bitcoin, Ethereum, Litecoin, etc. and all ERC20 tokens, with a single transaction. This is achieved by sending specific swap instructions within the transaction's memo. The THORChain network then routes the swap through the designated liquidity pools, and returns the desired token to the user.
With THORChain's DEX Aggregation, THORSwap is able to offer a wide range of trading pairs. As these trades are routed through the THORChain network, these trades are executed across multiple blockchains, and are therefore not limited to the Ethereum blockchain.
Conceptually all trades can be assigned into 1 of the following 4 categories:
THORChain to THORChain
These trades are executed on the THORChain network, and occur between native assets on the THORChain network, such as BTC, ETH, LTC, etc. The trades may be multichain, i.e BTC.BTC -> ETH.ETH, or single chain, i.e. BNB.BNB -> BNB.BUSD.
THORChain to EVM (aka SwapOut)
These trades originate on the THORChain network, and end on one of the supported EVM blockchains; as of January 2023 this is Avalanche and Ethereum only.
The swaps occur between any of the supported native assets on the THORChain network, such as Bitcoin, Litecoin, Dogecoin, etc. and ERC20 tokens on the Ethereum blockchain.
For example, a user may swap BTC.BTC -> ETH.CRV, or LTC.LTC -> ETH.UNI, etc.
THORChain has a whitelist of supported ERC20 tokens available for SwapOut. This whitelist is managed by THORChain developer team and was created to ensure that only established and legitimate tokens are available for purchase.
EVM to THORChain (aka SwapIn)
These trades originate on one of the supported EVM blockchains; as of January 2023 this is Avalanche and Ethereum only, and end on the THORChain network.
Unlike SwapOut, there is no whitelist of supported ERC20 tokens for SwapIn. Any ERC20 token can be swapped into the THORChain network into any of the supported native assets, such as Bitcoin, Litecoin, Dogecoin, etc.
For example, a user may swap ETH.SHIB -> BTC.BTC, or ETH.UNI -> LTC.LTC, etc.
EVM to EVM (Same EVM Chain)
These are trades that do not touch THORChain. They are executed on one of the supported EVM blockchains; as of January 2023 this is Avalanche and Ethereum only.
For example, a user may swap ETH.UNI -> ETH.CRV, or AVAX.JOE -> AVAX.PNG, etc.
Trades from Avalanche to Ethereum, and vice versa, are classified as SwapIn.