Ismeidy
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#THORChain on the brink of the abyss, #Rune plunges over 20% after freezing operations and facing insolvency allegations.
Cross-chain exchange protocol THORChain has paused its THORFi services as it faces financial uncertainties with insolvency allegations circulating.
The move is part of a 90-day “restructuring” plan to reduce issues associated with the “Savers and Loans” programs, which appear to have accumulated a large amount of unserviceable debt.
While trading functionalities such as swaps are still active, lending operations under THORFi are suspended. A 90-day restructuring initiative has been implemented through validator nodes to address the issues. Meanwhile, the price of Thorchain’s native token, Rune, has fallen by 30% in the past 24 hours.
The pause is intended to prevent a hasty exit, which could further destabilize the platform. Haseeb Qureshi, managing partner at Dragonfly, likened the situation to a “bankruptcy freeze,” indicating a severe liquidity crisis.
Concerns have been raised regarding THORChain’s ability to meet its obligations to creditors if there are widespread repayments, due to an apparent shortage of bitcoin reserves in THORFi’s lending pools.
This issue originated from substantial bitcoin borrowing at a time when prices were considerably lower than today, necessitating the minting of additional Rune to cover these obligations. Compounded by the lack of liquidations within the protocol, there are concerns that this could trigger a large drop in Rune value and diminish the purchasing power of THORChain, potentially mirroring the Terra/Luna crash of 2022.
#runecoin $RUNE
Cross-chain exchange protocol THORChain has paused its THORFi services as it faces financial uncertainties with insolvency allegations circulating.
The move is part of a 90-day “restructuring” plan to reduce issues associated with the “Savers and Loans” programs, which appear to have accumulated a large amount of unserviceable debt.
While trading functionalities such as swaps are still active, lending operations under THORFi are suspended. A 90-day restructuring initiative has been implemented through validator nodes to address the issues. Meanwhile, the price of Thorchain’s native token, Rune, has fallen by 30% in the past 24 hours.
The pause is intended to prevent a hasty exit, which could further destabilize the platform. Haseeb Qureshi, managing partner at Dragonfly, likened the situation to a “bankruptcy freeze,” indicating a severe liquidity crisis.
Concerns have been raised regarding THORChain’s ability to meet its obligations to creditors if there are widespread repayments, due to an apparent shortage of bitcoin reserves in THORFi’s lending pools.
This issue originated from substantial bitcoin borrowing at a time when prices were considerably lower than today, necessitating the minting of additional Rune to cover these obligations. Compounded by the lack of liquidations within the protocol, there are concerns that this could trigger a large drop in Rune value and diminish the purchasing power of THORChain, potentially mirroring the Terra/Luna crash of 2022.
#runecoin $RUNE
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