200 Million Dollar Move from the Project Experiencing a Major Price Drop Due to Debt Crisis! Here are the Details

The governance body of THORChain has accepted a significant proposal to convert defaulted debt into equity tokens as part of the restructuring efforts to resolve the debt crisis.

THORChain Plans to Overcome $200 Million Debt Crisis by Issuing TCY Stock Tokens

The majority of THORChain validators have accepted governance proposal 6, which demonstrates community consensus on how to address the approximately $200 million debt crisis that has arisen in the protocol.

THORChain had suspended its THORFi services, including the ‘Savings and Lending’ programs, due to financial uncertainties. A 90-day restructuring plan is in effect to address and reduce the issues arising from accumulated off-service debts.

The approved plan by the community is to convert the debt to equity, especially with a supply of 200 million, into a new token called TCY (Thorchain Yield).

This means that instead of repaying loans in bitcoin or ether, lenders and savers will receive TCY tokens and effectively convert their debt claims into equity in the Thorchain ecosystem.

TCY holders will have the right to permanently receive 10% of Thorchain’s revenue. The THORChain team stated, ‘THORChain will convert $200 million debt into equity through a new token that will consistently receive 10% of the network’s revenue’.

The proposal includes the minting of 200 million TCY tokens distributed at a rate of 1 TCY for each dollar of defaulted debt. The core team is expected to create a RUNE/TCY liquidity pool with $5 million from the treasury, providing $500,000 worth of liquidity at 0.1 dollars per TCY.

This means that for those with (ThorFi) in Thorchain’s lending and saving programs, their assets will be converted to TCY instead of being repaid in the original asset, but the duration of the recovery remains uncertain.