Thorchain, a decentralized finance (DeFi) protocol, has paused its savers and lending programs amidst a $200 million insolvency crisis. The protocol, which facilitates swaps between different blockchain assets like Bitcoin and Ethereum, has become a point of concern as users currently cannot withdraw assets, totaling approximately $111 million locked in the service. Thorchain's founder announced that this step aims to prevent significant loss while giving the community 90 days to develop a restructuring plan. As redemptions increased, the protocol minted more of its native token, RUNE, exacerbating a vicious cycle and inflating its supply, which has subsequently pushed RUNE’s price down significantly. Community members fear that failing to restructure could lead to the complete breakdown of the protocol. Despite these challenges, some advocates believe Thorchain remains valuable due to its potential and revenue generation from fees.

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