#THORChain , a decentralized liquidity protocol, faced insolvency due to its inability to meet #bitcoin and #Ethereum obligations, prompting a network pause for restructuring.
The protocol's financial distress is exacerbated by its design, which involves minting and selling $RUNE to meet lending obligations, leading to increased debt.
The situation reflects broader issues in DeFi where complex financial mechanisms like lending and savers positions can lead to significant volatility and potential collapse of systems, necessitating a strategic overhaul.