THORChain to Address $200M Debt by Issuing TCY Tokens for Equity Conversion
THORChain has unveiled a plan to convert its $200 million debt into equity by issuing a new token, TCY (Thorchain Yield), following the approval of “Proposal6.” A total of 200 million TCY tokens will be distributed to lenders and savers at a rate of 1 TCY per dollar of defaulted debt, effectively turning them into equity holders of the project.
This move follows the suspension of THORFi services on January 23, which was prompted by ongoing financial instability, as reported by CoinDesk.
THORChain also plans to establish a liquidity pool between RUNE and TCY, starting with $500,000 at a price of $0.1 per TCY, with $5 million from the treasury supporting the pool.
Holders of TCY tokens will receive 10% of THORChain’s ongoing revenue, offering a long-term incentive to those affected by the debt. However, the timeline for full financial recovery remains uncertain.
Despite these financial challenges, THORChain’s cross-chain swap services are unaffected. The price of the platform’s native RUNE token has dropped by 10% in the last 24 hours, extending its 30-day losses to nearly 50%, amid broader market declines.
