THORChain to Launch TCY to Address $200 Million Debt Crisis

A majority of THORChain validators have approved a proposal to resolve a debt crisis of approximately $200 million by converting the protocol’s liabilities into Thorchain Yield (TCY).

THORChain Community Update
Thank you to the community members, Node Operators, and builders who have remained committed throughout this critical moment for the network. Your dedication and contributions have been invaluable in shaping the path forward and ensuring THORChain’s…

— THORChain (@THORChain) February 2, 2025

In other words, instead of repaying loans in Bitcoin or Ethereum, users will begin receiving new tokens.

Overall, validators considered eight different initiatives.

While exact timelines and specific details are still being finalized, the main plan is as follows:

• Token holders can expect a 10% share of THORChain’s revenue indefinitely;
• Borrowers and savers will be eligible for 1TCY per $1 of protocol liabilities;
• The team will create a treasury-funded RUNE/TCY liquidity pool, allowing token holders to sell claims at their discretion;
• When market demand for THORChain’s revenue share is reflected in the asset’s price, holders will have the opportunity to exit on their terms.

The project team has promised to keep the community regularly informed as details are clarified.

On January 23, the protocol suspended THORFi services, including Lending and Savers programs, due to financial uncertainty.

According to the team, 31 validators left the network within a week and a half after the events. TVL in liquidity pools decreased by $100 million. At the time of writing, the figure stands at $208 million, according to DeFi Llama.

The situation did not prevent THORChain from continuing operations—conducting cross-chain swaps, supporting vaults and validators, producing blocks, and earning fees.

Currently, 87 nodes are operating in the network.

Amid the initiative, RUNE prices continued to decline. Over the past week, the token has fallen by 48%, and over the month by 75.9%, to $1.26, according to CoinGecko.

The pressure was partly due to a general downturn in the altcoin sector.

A user known as thecryptocanine explained the trend as expectations of further validator exits from the project. In his view, RUNE will soon drop below $1.

TCB: “If you want to give me millions to re-buy let me know, I can lose your money and have it in my wallet. There’s a bunch of validators that are going to sell I’m not going to stand there like a dumbass.”

Is it not obvious enough, if you’re still holding $RUNE validators are… pic.twitter.com/sm8OByXlI5

— theCryptoCanine (@thecryptocanine) February 1, 2025

“If you want to give me millions to re-buy let me know, I can lose your money and have it in my wallet. There’s a bunch of validators that are going to sell, I’m not going to stand there like a dumbass,” he quoted from the participants’ conversation.

Back in October 2023, the THORSwap team temporarily switched the interface to maintenance mode. Developers took this step following repeated reports that the hacker who breached FTX and other criminals were using the DEX for illegal transactions.