Thorchain, a decentralized finance protocol, is confronting a significant challenge with $200 million in toxic debt, leading to the suspension of its savers and lending programs. Approximately $111 million worth of digital assets is currently locked in the Thorchain network, with $98 million in savers' vaults alone, including $57 million in Bitcoin and $16 million in Ethereum. The network operators have frozen the funds to avert a potential disaster. The decision to pause was made via a consensus among validators, granting the Thorchain community 90 days to devise a restructuring plan. Concerns have been raised about the network's insolvency, exacerbated by the fact that Thorchain is unable to sustain its debt obligations if all users seek to redeem their assets simultaneously. The protocol has been minting its native asset, RUNE, to meet its lending commitments, leading to a downward spiral in its value. While many in the community believe in the long-term viability of Thorchain, the immediate future remains uncertain as it navigates through this financial crisis.

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