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RUNE Plunges 30% as THORChain Pauses Bitcoin, Ether Withdrawals
The pause comes amid community concerns around the settlements protocol solvency.
Updated Jan 24, 2025, 8:31 a.m. Published Jan 24, 2025, 7:01 a.m.
What to know:
- THORChain paused bitcoin (BTC) and ether (ETH) withdrawals on its lending and savers programs to prevent a potential insolvency risk.
- Network node operators proposed and implemented a 90-day pause in early Asian hours on Friday.
- THORChain's cross-chain swaps - its main service - remain unaffected.
Interblockchain settlements protocol THORChain paused and ether withdrawals on its lending and savers programs to prevent a potential insolvency risk.
Network node operators proposed and implemented a 90-day pause in early Asian hours on Friday, to formulate a plan to resolve debts, messages from THORChain's Telegram channels show.
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THORChain's lending program only has BTC and ETH, but its saver vaults support more assets.
A potential insolvency situation could be created if all loans and savers positions were closed and repaid at exactly the same time, and if market sentiment also caused a steep decline in RUNE.
THORChain meets its lending obligations by minting RUNE and selling it into liquidity pools. As such, deposits had been turned off a year ago as the community became increasingly concerned with the risk at the time.
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Some community members allege liabilities of nearly $200 million. Of that, some $107 million is contained in liquidity pools, which could be withdrawn or sold by liquidity providers (LPs) or RUNE holders in case of panic.
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THORChain's cross-chain swaps - its main service - remain unaffected. Users can still perform swaps and utilize liquidity pools without disruptions.
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