THORChain (RUNE), a notable player in the altcoin arena, is taking decisive action to address its staggering debt of over $200 million by introducing a new currency. The governing body of the protocol has approved a plan to create a currency named TCY, which will be distributed to creditors and savers in lieu of asset recovery. These TCY coins will empower holders with rights to a share of THORChain’s future revenues, despite ongoing uncertainties about the timeline and effects of this initiative.
How Will the TCY Coin Function?
The debt issue gained traction when THORChain halted its THORFi services in January. A comprehensive restructuring plan spanning 90 days is now in motion. Under the proposal, 200 million TCY coins will be issued, with one TCY allocated for each dollar owed. Holders of TCY will receive 10% of the future revenues generated by THORChain.
Will RUNE Recover from the Recent Decline?
The primary asset of THORChain, RUNE, has seen a dramatic plunge of over 70% in the last month, dropping from $2 to $1.3. This decline reflects broader trends within the cryptocurrency market, yet the protocol has still achieved trading volumes exceeding $250 million in just 24 hours.
The effectiveness of the TCY coin initiative remains in question, particularly given RUNE’s sharp depreciation. Key points to consider include:
- Establishment of a RUNE/TCY liquidity pool is crucial for TCY’s market viability.
- Five million dollars from the treasury is allocated to ensure liquidity.
- Stakeholder confidence hinges on effective revenue-sharing models.
The path forward for THORChain is fraught with challenges, as it navigates through both market volatility and the complex implications of its new currency strategy. The outcome of these efforts will be pivotal for the protocol’s future and its stakeholders.
