THORChain Stops Bitcoin and Ethereum Withdrawals, Leading to 30% RUNE Drop

user avatar

by Giorgi Kostiuk

2 years ago

THORChain, known for its decentralized finance protocol, has encountered severe liquidity issues, leading to a temporary halt in Bitcoin and Ethereum withdrawals. This move resulted in a substantial 30% drop in the value of its token RUNE.

Withdrawal Suspension and Its Reasons

Network node operators of THORChain proposed and executed a 90-day withdrawal pause. This action is aimed at preventing a potential liquidity crisis and developing a plan to address outstanding debts. The protocol's lending program supports only BTC and ETH, but their savings vaults have a broader range of assets.

Risks Associated with RUNE Token

The protocol faces bankruptcy risks if all loan and savings positions are closed simultaneously, particularly if a sharp drop in the market value of RUNE occurs. The protocol meets its lending obligations by minting and selling RUNE into liquidity pools, a mechanism that has raised concerns previously. Some community members estimate THORChain's liabilities at around $200 million, with $107 million in liquidity pools. Panic actions by liquidity providers or RUNE holders could further stress the protocol's stability.

Current State and Future Steps

Despite the challenges, THORChain's core service of cross-chain swaps remains unaffected. Users can continue exchanging and benefiting from liquidity pools without interruptions.

THORChain continues its operations amid the financial difficulties it faces, despite the temporary suspension. Protocol managers are now focused on restoring stability and devising strategies to prevent further crises.

Tier I

Sector: #18291

Sealed Hiding Place Room

Resource Cache

Resource Cache

Tier I

Requires 25% Tier Progress to Claim
Meme Cache

Meme Cache

Tier I

Requires 50% Tier Progress to Claim
Equipment Cache

Equipment Cache

Tier I

Requires 75% Tier Progress to Claim

After collecting, hiding places will be stored in your inventory and can be opened with Keys.

Other news

Criminals Use AI-Powered Tools for Cyber Attacks in India

Criminals are using AI-powered tools to conduct financially motivated cyber attacks against entities in India.

user avatarAisha Farooq

MEXC Enhances Security Measures and Capital Reserves

MEXC enhances its security framework and capital reserves by adding 1,000 BTC to its Futures Insurance Fund, aiming to protect user assets and provide a risk buffer during extreme market conditions.

user avatarTenzin Dorje

MEXC Unveils AI Trading Report with Key Insights from Crypto Traders

MEXC has released an AI Trading Report based on a survey of 3,708 crypto traders, highlighting the use of AI in trading strategies and user preferences for control and risk management.

user avatarBayarjavkhlan Ganbaatar

BingX EU Achieves MiCA License to Expand Crypto Services in Europe

BingX EU MEGE zweite GmbH has obtained a MiCA license from Austria's FMA, allowing it to offer regulated crypto services across 29 EEA countries.

user avatarMohamed Farouk

Zcash Faces 11% Decline Amid Growing Market Concerns

Zcash has experienced an 11% decline in the past 24 hours, raising concerns about market stability and the impact of AI on cryptography.

user avatarElias Mukuru

HTX Strengthens Global Compliance and Showcases at TOKEN2049

HTX has made significant strides in global compliance initiatives while participating in TOKEN2049, a major event in the crypto industry held in Singapore.

user avatarDiego Alvarez

Important disclaimer: The information presented on the Dapp.Expert portal is intended solely for informational purposes and does not constitute an investment recommendation or a guide to action in the field of cryptocurrencies. The Dapp.Expert team is not responsible for any potential losses or missed profits associated with the use of materials published on the site. Before making investment decisions in cryptocurrencies, we recommend consulting a qualified financial advisor.