THORChain (RUNE), a leading altcoin project, has decided to issue a new coin to balance its debt exceeding $200 million. The protocol’s governing body approved a proposal to convert this debt into a new coin called TCY. Instead of recovering their assets, creditors and savers will receive TCY coins which grant them rights to a portion of THORChain’s revenue. However, uncertainties remain regarding how long this process will take and its impact on stakeholders.
Debt Restructuring and TCY Coin Initiative
THORChain’s debt crisis became prominent when it suspended its THORFi services in January. The protocol aims to resolve this issue through a 90-day restructuring plan. As part of the approved proposal, 200 million TCY coins will be released, distributing one TCY for every dollar of debt. TCY coin holders will be entitled to 10% of THORChain’s future revenues.
According to the model proposed by the project, a RUNE/TCY liquidity pool will be established for the TCY coin. A sum of $5 million from the treasury fund is allocated to ensure $500,000 in liquidity.
RUNE’s Price Plummets
THORChain’s main network asset, RUNE coin, has lost over 70% of its value in the past month. The altcoin’s price decreased from $2 to $1.3, correlating with the broader sell-off in the cryptocurrency market. Despite this decline, the protocol managed to achieve over $250 million in trading volume within the last 24 hours.
The loss in RUNE’s value has raised concerns about the success of the TCY coin initiative. Stakeholders are questioning whether the introduction of this coin will alleviate the debt crisis. The protocol’s liquidity and revenue-sharing model is seen as crucial for establishing trust in the long term. However, short-term market volatility and uncertainties are heightening perceptions of risk.
