Thorchain, a decentralized finance protocol, faces significant challenges as its savers and lending programs have been paused amid a reported insolvency of $200 million. Users currently cannot withdraw funds from ThorFi, where approximately $111 million in digital assets are managed. This includes $57 million in Bitcoin and $16 million in Ethereum, now frozen in an attempt to stabilize the protocol. The network's operations are at risk, with validators considering a restructuring plan while users express concerns about the protocol’s viability. Thorchain's problems stem from an increasing liability situation that its current liquidity cannot sustainably support. The native asset RUNE has experienced inflation as users redeem funds, leading to a drop in its price. As of January 2025, the price of RUNE had decreased by 29%, prompting calls from community members for a strategic overhaul to avoid collapse. Supporters remain optimistic about Thorchain's recovery, citing its historical performance and revenue generation potential within the DeFi ecosystem.

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