THORChain Suspends THORFi Services Amid Financial Uncertainty
Cross-chain protocol THORChain has paused its THORFi services as it grapples with financial uncertainties and allegations of insolvency. A 90-day restructuring plan has been initiated to address debt issues linked to its "Savers and Lending" programs.Rune Price Plummets Following Suspension
The price of Rune, THORChain's native token, dropped by 30% within 24 hours of the announcement. Trading functions remain active, but lending services are on hold, raising concerns about the platform's financial stability.Challenges in Meeting Debt Obligations
THORChain faces mounting debt from earlier bitcoin loans taken at lower prices, necessitating the minting of additional Rune tokens. This debt, coupled with the protocol’s reliance on Rune for collateral, has raised fears of a liquidity crisis akin to Terra/Luna’s 2022 collapse.Community and Validator Response
The community and validators are evaluating proposals for economic redesigns to stabilize the network. ThorChain founder John-Paul Thorbjornsen expressed confidence, stating, "The protocol makes a ton of money and can service the debt—once restructured."
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