RUNE Plummets 45%: THORChain's Future Hangs in Balance
1min read THORChain's native token, RUNE, has plummeted by a further 45% overnight, reaching its lowest point since 2020. The cross-chain swapping protocol has been grappling with a $199 million liability, leading to the suspension of Bitcoin and Ethereum withdrawals within its lending and savings programs. As the community awaits a restructuring plan, RUNE's value has continued to decline, raising concerns about the protocol's long-term viability.
THORChain's founder, John-Paul ('JP') Thorbjornsen, has faced intense scrutiny over potential conflicts of interest and activity managing multiple projects. Influential THORChain node and core contributor TB has also sold all his RUNE, signaling a potential exodus of validators from the network. Around 20% of the network's nodes have indicated their intent to leave, corresponding to approximately 20 million RUNE that could potentially be dumped on the market.
Despite the internal struggles and growing criticism, many members of the THORChain community remain committed to the protocol. The community has unanimously voted in favor of a proposal to 'get users liquid again' and convert defaulted debt to $TCY equity with no private raise. The proposal suggests distributing TCY to affected users, with 10% of fees paid out in RUNE to TCY holders in perpetuity. This plan aims to make users whole, increase capital efficiency, and attract new liquidity to the protocol.
The coming days and weeks will be critical for THORChain as it navigates this challenging time. The protocol's ability to implement the proposed solution and avoid the fate of failed crypto projects will be closely watched by the community and the broader cryptocurrency market.
