THORChain (RUNE), a decentralized cross-chain liquidity protocol, is under insolvency scrutiny, as highlighted by Twitter user @1984_is_today. The network has halted operations, and validators are considering a reorganization plan. THORChain faces $97 million in debt but holds only $107 million in external liquidity, which could be quickly depleted. Additionally, the protocol is exposed to hidden leverage risks. The outcome might be a "death spiral" leading to RUNE's collapse or a scenario where creditors claim assets and gradually pay off debts. This issue comes after previous setbacks, including a $25 million hack in 2021 and an $8 million exploit from its liquidity pools. Investors should pay attention to these developments due to potential ripple effects in the cryptocurrency market.