Thorchain has suspended the recordings of Bitcoin and Ethereum within his credit and savings programs after reports about an obligation of $ 199 million emerged.
On January 24, Thorchain founder John-Paul said Thorbjornsen unveiled That validator junction activities for Thorfi services have been paused. This suspension temporarily stops the repayments of debts and the repayment of synthetic assets, while validators deliberate about a restructuring plan.
Despite these disturbances, trade and exchange functions remain operational.
The problem
On January 24, TCB, a prominent investor and protocol junction runner, unveiled that the debts of Thorchain $ 97 million in loans and $ 102 million in savers and synthetic assets include.
In the meantime, the Protocol contains $ 107 million in liquidity, which can include liquidity providers at any time. This imbalance is a considerable risk for the stability of the platform.
To tackle this situation, TCB has emphasized two possible scenarios in which a small percentage of the creditors quickly withdraws their money, causing a collapse, whether the protocol interrupts the operations to restructure the debts. The latter option aims to guarantee the viability of the platform in the long term.
Shapeshift CEO Erik Voorhees explained That the credit and savings programs were experimental characteristics that entailed significant risks.
According to him:
“Lending and Savers were two additions to Thorchain that were experimental. At the moment it is clear that these designs failed, they were too risky. Although these functions were not the core of the protocol, its risk had been a gloomy overhang for a while: no one knew for sure how long it would take before users would clean up their positions. ”
Another contributor, Proof of Steve, stated that excessive trust on the rune, the original token of the protocol, to cover risks, made the platform vulnerable for external threats. He supported the suspension and noted that it gives the community time to come up with a sustainable solution.
Thorchain profit
Thorbjörnsen assured Users that the platform generates sufficient income to be able to meet its obligations after restructuring. However, he warned Rune that it could be related to further price decreases in this period.
Proof of Steve too shared An update showing that the protocol income has remained stable, with a recent increase in the number of unique daily savers.
TCB also pointed out that last year Thorchain generated more than $ 30 million in reimbursements and is on course for higher income this year.
Thorchain TVL and Rune DALEN
Since the announcement, the price of Rune has fallen by almost 30% and reached the lowest point in two years of $ 1.9 before he recovered slightly to $ 2.4 at the time of writing.
TCB attributed the decrease to speculative shortsellers who gambled on further instability. He assured the community that the protocol had eliminated the functions that the downward cycle fueled.
He written:
“The majority of the sales volume consists of shortsellers who speculate that a negative cycle is created. The functions that could steer it in a downward reflection spiral have been eliminated and will be eliminated from the protocol, that is the only way. ”
In the meantime, the total value (TVL) on Thorchain has fallen by more than $ 100 million to $ 297 million since 7 January, according to Defillama facts.
