THORChain Plans to Settle $200 Million Debt With New TYC Token

THORChain, the cross-chain liquidity protocol, is facing debt of nearly $200 million. To address this situation, the THORChain community has come up with a proposal to issue a new token called TCY.

Specifically, on January 23, THORChain was forced to suspend ThorFi services, including the “Savings and Loan” program, due to severe financial uncertainties. The decision came after the protocol accumulated an unpayable debt of nearly $200 million in these programs.

To address the crisis, THORChain's board of directors adopted proposal 6. This is a 90-day restructuring plan that focuses on converting debt into equity by issuing a new token called TCY (Thorchain Yield).

Specifically, users who have lent or deposited savings on the THORChain platform and are currently experiencing overdue debt will not be repaid in Bitcoin or Ethereum as originally pledged. Instead, they will receive TCY tokens. Essentially, this turns their debt claims into shares in the THORChain ecosystem.

One of the attractions of the TCY token is that its holders will enjoy 10% of THORChain's revenue permanently. This is an important factor that can encourage users to accept TCY and continue to stick with THORChain's ecosystem.

Details on the release of TCY:

• A total of 200 million TCY tokens will be generated.
• The allocation rate is 1 TCY per USD of overdue debt.
• The RUNE/TCY Liquidity Pool will be established with $500,000 in liquidity, with a starting price of $0.1/TCY.
• $5 million from THORChain's treasury will be used to fund this liquidity pool.

The TCY token solution aims to help THORChain solve the debt crisis, rebuild user trust and ensure the sustainable development of the protocol in the future. However, there are still many challenges ahead, especially securing the value of the TCY token and attracting users back to the platform after the downtime.

Despite the announcement of restructuring efforts and 6 proposals, the price of RUNE, THORChain's native token, has fallen by 35% over the past week. This could be due to the market's apprehension about THORChain's future, as well as the effect of the widespread altcoin sell-off.

Despite the difficulties, THORChain has maintained significant trading volume, with $270 million processed in the last 24 hours. This suggests that there is still a large number of users who trust and use this protocol.

THORChain's introduction of a TCY token solution to solve the debt crisis is a bold and potential step. However, the success of this solution will depend on many factors, including community acceptance, the ability to attract users back, and the recovery of the cryptocurrency market as a whole.