THORChain Restructuring Plan Approved by Node Operators
- THORChain node operators have approved a restructuring plan allowing it to convert its $200M debt into equity tokens.
- The move is aimed at stabilizing THORChain’s operations by addressing its liabilities.
- THORChain (RUNE) price rose 13.7% after the news but remains down 72.7% over the past month.
THORChain node operators have approved a restructuring plan proposal that will see a decentralized liquidity network convert a $200 million debt into equity tokens. The approval will allow THORChain to address its financial liabilities, stabilize operations, and restore confidence among its users.
Background of the Restructuring Plan
The restructuring proposal, known as “Proposal6,” emerged after THORChain paused its lending and savers programs due to community concerns about the risks associated with its ThorFi feature. This decision led to the accumulation of $200 million in liabilities, causing a contraction in the network and a drop in the price of RUNE.
Details of the Approved Plan
Proposed by Maya Protocol’s Aaluxx Myth, the restructuring plan involves minting 200 million “TCY” tokens, each representing $1 of the platform’s debt. These tokens will be distributed to those affected by the program suspensions and will receive a portion of THORChain’s network revenue in perpetuity.
To provide liquidity for TCY tokens, THORChain’s treasury will seed a pool, allowing holders to convert their equity tokens into other assets. This setup aims to give creditors flexibility in exiting their positions based on market demand.
Implementation and Community Response
The implementation of the plan is now in the hands of THORChain’s development teams, with details of the timeline still being finalized. While some community members view this as a positive step towards stability and growth, others have concerns about the complexity of the new token structure and potential legal implications.
Reaction of THORChain (RUNE) to the Plan
Following the approval of the restructuring plan, the price of RUNE experienced a 13.7% increase. However, the token has seen significant declines in recent weeks, indicating ongoing market concerns about THORChain’s future stability.
