Thorchain (RUNE) experienced a significant price drop of about 26%, leading to concerns about the project's insolvency. As a result, Thorchain halted its lending and saving services. A community member claimed that Thorchain is insolvent and cannot meet its obligations. Validators have suspended the network while voting on a restructuring plan. Thorchain's total liabilities amount to $200 million, with $107 million in liquidity backing this liability. The project's token, RUNE, is heavily relied upon. Thorchain acknowledged the complexity of its system and lack of understanding among users. However, if Thorchain resolves its insolvency issue, there is potential for recovery. The project plans to tokenize the liabilities for a 90-day restructuring period and use protocol fees to rebuild reserves. Thorchain's founder believes pausing lending and saving services is the best move to avoid a "death spiral." Some community members support this plan, while others are skeptical. This situation serves as a lesson for other over-leveraged projects.



Other News from Today