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📌 Sawchain (RUNE) falls 26% after bankruptcy filing

Thorchain (RUNE) falls 26% amid insolvency claims Thorchains price fell hard amid ecosystem concerns. Rune

– Thorchain (RUNE) falls 26% amid insolvency claims Thorchain’s price fell hard amid ecosystem concerns

The protocol was driven by insolvency and claims that it is an unsustainable model

Developers are repositioning the Thorchain protocol and working on a model that guarantees long-term growth. Developers are repositioning the Thorchain protocol and working on a model that guarantees long-term growth.

January 24, the price of Thorchain (RUNE) fell 26% from 3 to 2 US dollars. According to market data, the token was trading at US$2.18, a 30% drop in 24 hours.

The sudden drop in price alarmed many Internet users, with many voicing fears that Thorchain’s bankruptcy may be imminent.

This

amidst these claims, the protocol suspended its credit and savings services.

a member of the Thorchain TCB on X community stated on his page that Thorchain is insolvent.

He said the project was insolvent due to the use of bitcoin (BTC) and Ethereum (ETH) to fulfill its obligations, and stated that Thorchain is insolvent, especially in the case of large debt payments or credit downgrades of savers and synthesizers.

the situation, Validators are looking for reasons to suspend network operations while they vote on a restructuring plan.

TCB revealed that Thorchain’s total debt, including credit and savings programs, is $200 million.

$107 million (unlocked (unlocked) liquidity covers these liabilities. He explained how heavily the system depends on mining the project’s token, RUNE; an illustrative comparison was made between

RUNE and Terra’s UST and LUNA. Until then, the protocol had been a growing concern; eventually, Tohein admitted that the system is too complex, and only a limited number of people fully understand how the leverage function and liquidity interact with each other and how that affects the underlying asset.

At current levels, RUNE doesn’t reflect the confidence that analysts and market participants had recently.

About five months ago, @cryptojack of X shared his optimism with subscribers with a bullish chart. Analysts noted that the digital currency could quadruple in value.

At the time, RUNE was trading at around $3.7. A quadrupling would have seen the coin reach $14.00.

Confidence at the time was based largely on fundamentals If the project

became insolvent, RUNE could find a balance and chart a course to recovery. Other events, such as the conclusion of important partnerships, could also be a catalyst for price growth.

J.P., Thorchain’s founder, agrees that shutting down the savings and loan service is the best way out for the project.

He says Thorchain avoids a potential death spiral as investors rush to exit:

the liabilities will be tokenized during the 90-day restructuring period, and 10% of the protocol fee will be used to accumulate RUNE and rebuild reserves.

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