The core developers of THORChain have unveiled a restructuring plan aimed at addressing $200 million in debts incurred through their Lending and Savings program. This decision follows weeks of intense community discussion and a contraction in network activity.
Financial Challenges and Actions
On January 23, following discussions regarding the risks posed by THORFi, Node Operators decided to halt refunds for lending and savings features. This move sparked disapproval within the THORChain ecosystem.
Community Reaction and Consequences
The decision led to the exit of 31 validators, a loss of $100 million in liquidity, and a significant drop in RUNE's price. Despite this, THORChain continues its operations, processing cross-chain swaps and generating revenue.
Restructuring Plan and Future Hopes
The community proposed eight different restructuring plans, with 'Proposal6' being selected. Key elements include converting debt into equity via a new revenue-sharing token, granting debt holders 1 equity token for each $1 owed with future revenue entitlements. While the exact implementation timeline is yet to be finalized, the team promises regular updates.
Despite recent setbacks, THORChain developers remain optimistic about the future, stating that the network will continue to operate and emerge stronger.
