THORChain Temporarily Halts BTC and ETH Withdrawals Amid Liquidity Concerns
THORChain, the interblockchain settlements protocol, has enacted a 90-day suspension on bitcoin (BTC) and ether (ETH) withdrawals from its lending and savers programs, citing efforts to mitigate potential insolvency risks.
The decision was initiated by network node operators and announced early Friday during Asian trading hours, according to updates shared in THORChain’s Telegram channels. This measure is intended to provide developers and the community with time to develop a strategy to address outstanding liabilities and ensure the protocol’s stability.
While THORChain’s lending program supports only BTC and ETH, its saver vaults include additional assets. The suspension was implemented to avoid a scenario where simultaneous closure of loans and saver positions, coupled with a steep decline in RUNE prices, could lead to a liquidity crisis.
To meet debt obligations, the protocol mints RUNE and sells it into liquidity pools, a mechanism that has drawn scrutiny from community members. Concerns over solvency led to the halt of new deposits into the program last year.
Community estimates suggest liabilities could reach $200 million, with $107 million currently held in liquidity pools. A mass withdrawal or sell-off by liquidity providers (LPs) or RUNE holders could exacerbate financial strain, highlighting the importance of the current pause.
Despite the challenges, THORChain’s cross-chain swap services—the platform’s primary functionality—remain unaffected. Users can continue performing swaps and interacting with liquidity pools without disruption, ensuring the core network utility is preserved.
