- THORChain launches TCY token to convert $200M debt into equity with perpetual dividends.
- RUNE drops 35%, falling from $2 to $1.3 after restructuring announcement.
- $5M treasury grant funds TCY/RUNE liquidity pool to support token stability.
THORChain is currently undergoing a restructuring after facing a $200 million debt crisis due to ongoing financial challenges. In an effort to resolve the financial challenge, the decentralized liquidity protocol has introduced a new token—TCY (Thorchain Yield)—through a 90-day restructuring plan.
The token aims to convert nearly $200 million in unserviceable debt into equity and will pay dividends “in perpetuity” to its holders. The proposal was presented to the THORChain community with the goal of converting the debt into tokens.
THORchain Project and Debt Revamp Model
TCY tokens will be allocated at a rate of 1 TCY per dollar of previous outstanding debt, transforming lenders and savers into stakeholders. It is said to create an RUNE/TCY liquidity pool with an initial funding of $500,000, setting the starting price at $0.1 per TCY. This would be backed by a $5 million grant from the treasury, ensuring liquidity and stability for the newly issued tokens. A 10% earning power would be given indefinitely to token holders to provide them with long-term incentives for those affected by the debt.
RUNE Sinks 35% After Debt Restructuring Reveal
Although the government approved of the new financial strategy, RUNE’s value tumbled 35% within seven days, sliding from $2 to $1.3. The asset has depreciated over 70% in the previous month, which could be as a result of the widespread losses across altcoins.
THORChain’s system, however, still remains operational, facilitating over $270 million in swaps over the past day. The restructuring initiative aims to address economic hurdles while ensuring seamless functionality. RUNE experienced a nearly 50% drop in the last month, briefly slipping under $2 before recovering above 10%. Other key points about the project to take into cognisance are:
- To ensure Liquidity, $5million from the treasury has been allocated
- The creation of TCY/RUNE liquidity pool is essential for TCY market sustainability
- Effective revenue sharing models are key to maintaining stakeholder confidence.
Related Reading | MANTRA Explodes 23% Amidst Market Crash