THORChain Undergoes Restructuring After Facing a $200M Debt Crisis, Introduces New TCY Token

THORChain is currently undergoing a restructuring after facing a $200 million debt crisis due to ongoing financial challenges.

Decentralized liquidity protocol THORChain is pivoting towards a new direction. The protocol, which has been grappling with a $200 million debt crisis, is now introducing a new token, TCY (Thorchain Yield), as part of a 90-day restructuring plan.

The token will serve as a crucial element in converting nearly $200 million in unserviceable debt into equity. It will also pay dividends “in perpetuity” to its holders. The proposal was put forth to the THORChain community, aiming to convert the debt into tokens.

THORChain Project And Debt Revamp Model Explored

TCY tokens will be dished out at a rate of 1 TCY per dollar of previous outstanding debt, effectively turning lenders and savers into stakeholders. The protocol will reportedly create an RUNE/TCY liquidity pool with an initial funding of $500,000, setting the starting price at $0.1 per TCY. This will be backed by a $5 million grant from the treasury, ensuring liquidity and stability for the newly issued tokens.

Furthermore, a 10% earning power will be indefinitely credited to token holders, providing long-term incentives for those impacted by the debt.

RUNE Sinks 35% After Debt Restructuring Reveal

While the government approved the new financial strategy, RUNE’s value took a hit, tumbling 35% over seven days, sliding from $2 to $1.3. The asset has depreciated over 70% in the previous month, which could be attributed to the broader losses across altcoins.

However, THORChain’s system continues to operate, facilitating over $270 million in swaps in the past day. The restructuring initiative is designed to navigate economic hurdles while ensuring seamless functionality.

RUNE saw a nearly 50% drop in the last month, briefly slipping under $2 before recovering above 10%.