⚠️ How THORChain (RUNE) Is Spiraling Into Collapse ⚠️
🚨 RUNE Crashes Over 70% — THORChain Nears Insolvency
THORChain is drowning in $200M+ debt, with a broken lending model pushing it toward a Terra/LUNA-style meltdown. Liquidity providers (LPs) are trapped, redemptions are frozen, and the protocol is functionally bankrupt.
📊 The Numbers Don’t Lie:
$97M in debt from BTC & ETH borrowers
$102M in synthetic & LP liabilities
Only $30M in yearly revenue
Even if all fees were used to pay debt, it would take 6+ years—assuming no more bank runs or price collapses.
🔍 How Did It Happen?
1️⃣ Flawed Lending Model:
Users borrowed BTC/ETH without liquidation risks
RUNE was burned to issue loans
If borrowers didn't repay, the system minted more RUNE
🚨 Result: The protocol effectively shorted BTC & ETH. When prices pumped, liabilities exploded.
2️⃣ Liquidity Providers Trapped:
LPs trusted the system to be solvent
Withdrawal freeze is the only thing preventing a bank run
If redemptions open without a plan, the system collapses
3️⃣ RUNE Death Spiral:
Minting new RUNE dilutes holders
Lower RUNE prices increase debt
Hyperinflation risk mirrors Terra/LUNA
⚡ Two Paths Forward:
🔴 Option 1: Let It Burn
Withdrawals drain the system
RUNE hyperinflates to zero
THORChain dies
🟢 Option 2: Controlled Recovery
Freeze redemptions longer
Tokenize debt (like Bitfinex recovery)
Use fees to buy back debt
Shut down risky lending for good
❗ What’s Next for RUNE?
💥 Full Collapse:
RUNE under $1
System fails entirely
✅ Successful Recovery:
Debt tokenized
Protocol focuses on swaps only
Slow debt repayment
⏳ THORChain is running out of time. Investors are betting on a miracle—but collapse is closer than ever.
