THORChain has made a pivotal move to address its ongoing financial challenges by passing Proposal 6, converting nearly $200 million of unserviceable debt into equity. The new token, Thorchain Yield (TCY), with a total supply of 200 million tokens, aims to provide a unique solution to the platform’s debt crisis.
This decision follows the suspension of THORFi services on January 23 due to financial uncertainty, as reported by CoinDesk. In a bid to stabilize its ecosystem, THORChain has set a conversion rate of 1 TCY per dollar of defaulted debt, transforming lenders and savers into equity holders. These TCY tokens offer a promising alternative for those impacted by the platform’s financial difficulties.
To kickstart the recovery process, THORChain will establish a liquidity pool between its native RUNE token and TCY. This liquidity pool will be initially funded with $500,000 at a price of $0.1 per TCY, drawing from a $5 million allocation from the treasury. The plan aims to stimulate liquidity and investor confidence, signaling a move toward financial rejuvenation.
In a bold move to secure long-term interest from TCY holders, THORChain has committed to distributing 10% of its revenue indefinitely to TCY token holders. This strategic revenue-sharing model is designed to incentivize continued support and provide a recovery mechanism for those affected by the debt crisis. However, the full timeline for financial recovery remains uncertain, as the platform navigates the path ahead.
Despite these challenges, THORChain’s core offering — its cross-chain swaps — remains unaffected, ensuring continued value for users. Nevertheless, the price of THORChain’s native token, RUNE, has been hit hard, down 10% in the last 24 hours and nearly 50% over the past month, reflecting broader market trends.
Also Read: Is THORChain Facing Insolvency? RUNE Plunges 30% as Bitcoin and Ether Withdrawals Are Paused
The decision to issue TCY tokens marks a critical juncture for THORChain, one that could shape the platform’s future in the rapidly evolving crypto landscape.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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