THORChain Proposes Major Debt Conversion to Equity
In a significant move aimed at addressing its financial challenges, the members of THORChain have successfully passed “Proposal 6,” which facilitates the conversion of nearly $200 million in unserviceable debt into equity through the introduction of a new token named TCY (Thorchain Yield). This token will have a total supply capped at 200 million tokens.
This decision comes in the wake of THORChain suspending its THORFi services on January 23, a measure taken due to ongoing financial uncertainties that have affected the platform’s operations, as previously reported by CoinDesk.
Under the new proposal, TCY tokens will be allocated to creditors at a rate of 1 TCY per dollar of defaulted debt. This strategy effectively transforms lenders and savers into equity stakeholders within the THORChain ecosystem. Furthermore, THORChain is set to create a RUNE/TCY liquidity pool, initiating with a funding of $500,000 at a starting price of $0.1 per TCY, drawing from a total of $5 million from the treasury.
For those holding TCY tokens, there is a long-term incentive in place: they will receive 10% of THORChain’s revenue indefinitely. This revenue-sharing model is designed to serve as a recovery mechanism, offering hope to those impacted by the ongoing debt crisis. However, the timeline for achieving complete financial recovery remains uncertain.
Despite these developments, THORChain’s core service—its cross-chain swaps—continues to operate without interruption. However, it’s worth noting that the price of the platform’s native token, RUNE, has seen a decline of 10% in the last 24 hours, reflecting broader market trends, and extending its losses over the past 30 days to nearly 50%.
