The decentralized and inter-chain liquidity protocol Thorchain suspended its savers and loan programs on Thursday, preventing Thorfi users from being able to withdraw Bitcoin,, Ethereumand other cryptographic active ingredients in difficulty services.
Approximately $ 111 million in digital assets were borrowed Via the Thorchain protocol, and $ 98 million in crypto are currently locked in savers. This amount from depositors includes $ 57 million in Bitcoin and $ 16 million from Ethereum, according to Thorchain. dashboard.
The problem is that anyone is currently having money in Thorfi cannot withdraw it, as the network is faced with an insolvency of $ 200 million. The operators of the Thorchain network froze these funds to try to avoid a disaster scenario for the DEFI protocol. The Director of Dragonfly Capital, compared this decision to a “bankruptcy gel”, calling it “First chain restructuring. “
The decision was made “via nodes”, according to the founder of Thorchain, JP Thorbjornsen, who said On X that this decision gave to the Thorchain community 90 days to develop a restructuring plan, while asking “everyone to relax”.
As a decentralized finance protocol, or DEFI, Thorchain allows users to exchange assets on different networks without authorization, reflecting the services of a centralized exchange without ever taking total control of user funds.
In 2022, Thorchain deployed his savers program, billed in the form of blog Like a means for users of DEFI to “win a yield in kind” in the same way as the liquidity suppliers of Thorchain.
According to TCB, a pseudonym member of the Thorchain community, the network is “insolvent”. In the event that users are trying to buy $ 199 million in debt in Thorchain, the network could not fulfill its obligations in a sustainable manner, he said. said on X.
The network currently fulfills its loan obligations by creating Rune, the native active in the network, then selling it in liquidity pools on Thorchain, said TCB. This created a reflection cycle, in which the acquisitions aggravate the obligations of Thorchain, even if Rune is burned when the users engage for the first time in the savers program.
Recently, the acquisitions of savers and lenders inflated the offer of Rune while lowering its price. While 6.6 million runes have been burned so far this month, 16 million have been struck in the meantime, according to Thor graphics.
If the Thorchain community decides to leave the protocol as is, TCB said that a handful of people will first leave Thorfi’s services, while “Rune will enter a descending spiral and Thorchain will be destroyed”.
When writing these lines, Rune Prize had dropped 29 % on Friday to $ 2.08Reaching its lowest price since October 2023. At its peak in May 2021, the rune was estimated at $ 20.87.
The supporters of Thorchain, including the CEO of Shapeshift and the Bitcoin OG, Erik Vorhees, believe that the protocol is still worth sailing despite the irrevocable debts that weigh on the Rune Prix.
On x, vorhees describe Thorchain as one of the “most precious protocols in the ecosystem”. According to DefailleHe raised $ 47 million in lifetime fees.
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