Thorchain, a decentralized finance (DeFi) protocol, is currently facing a severe financial crisis with an insolvency of $200 million. The protocol has paused its savers and lending programs to prevent a disaster scenario, locking approximately $98 million in assets from depositors, including significant amounts in Bitcoin and Ethereum. This move, described as a 'bankruptcy freeze,' was decided by the network's operators and aims to give the community 90 days to devise a restructuring plan. Thorchain relies on minting its native token, RUNE, to meet its obligations, but redemptions have inflated RUNE’s supply, leading to a decline in its price, which fell 29% shortly thereafter. Experts warn that if user redemptions continue, the network could collapse, leaving many users unable to withdraw their funds. Despite these challenges, some community members believe Thorchain has intrinsic value and could still be saved.

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