- THORChain’s governance approved a plan to convert $200M in defaulted debt into equity through a new token, TCY, which grants holders 10% of network revenue.
- RUNE's price dropped 35% in a week amid restructuring efforts, while THORChain maintained network activity with $270M in daily swap volume.
THORChain’s governance body has approved a proposal to address its nearly $200 million debt crisis by converting defaulted debt into equity tokens. The decision follows a majority vote by the network’s validators on Proposal 6, reflecting community consensus on the restructuring approach.
The protocol suspended its THORFi services, including its "Savers and Lending" programs, on January 23 due to financial instability. A 90-day restructuring plan has been implemented to mitigate the impact of unserviceable debt in these programs.
Under the approved plan, THORChain will introduce a new token, TCY (Thorchain Yield), with a total supply of 200 million. Debt holders will receive 1 TCY per dollar of defaulted debt, effectively converting their claims into equity within the ecosystem. Unlike traditional repayment in Bitcoin or ether, TCY holders will instead receive 10% of THORChain’s network revenue in perpetuity.
"THORChain will convert ~$200M of debt into equity through a new token that will receive 10% of network revenue in perpetuity," the team at THORChain stated.
To support liquidity for the new token, THORChain’s core team plans to establish a RUNE/TCY liquidity pool with $500,000 at an initial rate of $0.10 per TCY. This pool will be backed by a $5 million allocation from the project’s treasury. However, the timeline for full recovery remains uncertain.
Despite the restructuring measures, THORChain’s native token, RUNE, has continued to decline. Over the past week, RUNE dropped by 35%, falling from $2 to $1.30, reflecting broader weakness in the altcoin market. The token has lost more than 70% of its value in the past 30 days.
Despite these financial setbacks, THORChain’s network activity has remained steady. The platform processed $270 million in swap volume over the past 24 hours, indicating continued usage amid restructuring efforts.
Edited by Harshajit Sarmah
