THORChain Converts $200 Million Debt into Equity with TCY Token
In a bold move, THORChain has decided to convert its $200 million debt into equity through the issuance of a new token called TCY (Thorchain Yield). This rescue plan, approved under the name ‘Proposal6,’ allows creditors to become shareholders by receiving 1 TCY for every dollar of unpaid debt.
This initiative comes after the suspension of Bitcoin and Ethereum lending services by THORFi, a branch of THORChain, on January 23. The platform had halted withdrawals due to growing financial uncertainties.
TCY: A Mechanism for Compensation and Revival
In addition to transforming creditors into shareholders, THORChain plans to inject $500,000 to create a RUNE/TCY liquidity pool, with an initial price of $0.10 per TCY. This fund will be funded by $5 million from the protocol’s treasury.
TCY holders will have a perpetual right to 10% of the revenues generated by THORChain. This approach aims to provide long-term compensation leverage, although the prospects for financial recovery remain uncertain.
Limited Impact on Swap Services but Pressure on RUNE
Despite this financial crisis, THORChain’s core functionalities, including cross-chain swaps, remain operational. However, the turbulence surrounding the debt and restructuring has had a significant impact on the RUNE token, which has experienced a decrease of over 50% in the past 30 days.
