Thorchain, a decentralized finance (DeFi) protocol, is grappling with a significant financial crisis, facing a $200 million insolvency. The protocol has paused its savers and lending programs to prevent users from withdrawing funds, as approximately $111 million in digital assets are currently through its services. Users having $98 million locked in savers vaults, including substantial amounts of Bitcoin and Ethereum, can no longer access their investments. Thorchain’s restructuring plan was implemented to provide the community with 90 days to strategize on recovery while validating that the protocol can generate ample revenue to service its debts once restructured. The ongoing financial strain is attributed to increased redemptions by savers, disrupting the supply of its native asset, RUNE. This situation has resulted in a drastic price drop for RUNE, decreasing by 29% to its lowest point since October 2023. Despite these challenges, some supporters assert that Thorchain maintains its value and potential in the DeFi ecosystem, even amidst these setbacks.

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