RUNE,
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the native token behind the Layer-1 network, THORChain continues to plummet amid concerns of mounting financial issues. One week ago today, RUNE was trading at around $2.45, per Coingecko.
Today, its holders are waking up to see a further 5% slide to around $1.25.
Yesterday (February 2), RUNE briefly went as low as $1.03 before returning to its current levels. Many in the THORChain community are concerned that RUNE is heading to 0.
However, over the weekend, Thor Chain validators passed Proposal 6 via super majority, with plans to halt RUNE’s pending death spiral.
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Where Did THORChains Issues Start?
On January 23, it was reported that THORChain had suspended Bitcoin and Ethereum withdrawals within its lending and savings program, ‘ThorFi,’ after claiming a $199 million liability.
While the community waited for an official response from the team regarding a plan to address the protocol’s debts and thus ensure its long-term viability, RUNE dropped around 30% in value to $1.90.
Many in the THORChain space were quick to blame its founder, John-Paul (‘JP’) Thorbjornsen, with claims of conflicts of interest and being spread too thin due to his overseeing multiple projects.
JP is currently listed as working on Vultisig, a multichain crypto vault with two-factor security. Alongside Vultisig, the THORChain founder is also heavily involved in assisting the developers of Layer-1 network Kujira in their re-branding to Rujira and subsequent migration into the THORChain ecosystem.
THORChain Community Update
Thank you to the community members, Node Operators, and builders who have remained committed throughout this critical moment for the network. Your dedication and contributions have been invaluable in shaping the path forward and ensuring THORChain’s…— THORChain (@THORChain) February 2, 2025
Proposal 6: A Solution To ‘Get Users Liquid Again’
Despite its ongoing struggles and a rising amount of FUD from those within and outside the community, there still seems to be a strong core group committed to the network. JP has been vocal on X to assure the community of his conviction and belief for the future of THORChain.
His most recent thread came around 24 hours ago and began with him stating, “TC (THORChain) now gets to start a new chapter as the basic, boring decentralized liquidity protocol.”
Now, all that is left is for the THORChain team to implement its Proposal 6 plan and keep the network alive. The community unanimously voted to favor the proposal, aimed at ‘getting users liquid again’ and converting defaulted debt to $TCY equity with no private raise.
“Proposal 6 passed by super-majority. Nodes stepped in to provide certainty and a way forward,” JP posted to X.
Deep Dive On Proposal 6: Technical And Non-Technical Explanations
Proposal 6 passed by super-majority.
Nodes stepped in to provide certainty and a way forward.
1) Creditors have a way to liquidity
2) All leverage stripped out in one go
3) TC can get back to basicsThanks to everyone who supported.
— JP (@jpthor) February 2, 2025
From the official team documentation, Proposal 6 is explained as follows:
“This proposal is a mix of both TCB v1 & v2 and CryptoXZ v1 proposals, where we convert debt into equity instantly. The 10% of fees are given out ad infinitum instead of until 2x intial debt (TCB v1), thus uncapping upside and making it more attractive to enter new liquidity for bailout (decreasing likely payback time for affecter users).
And the instant mint & full airdrop of $TCY (200M total & fixed supply) and creation of a pool totally eliminates the need for a private raise requiring trust (CryptoXZ v1) while also putting the treasury offer of $10M to very good use and making the situation more attractive for current and future DLPs.
This proposal is also amongst the easiest to code, as precedent exists in $MAYA and mechanics required are mostly already in the codebase. No RUNE is minted whatsoever and the protocol sheds all its liability on day 1.”
The nontechnical summary of Proposal 6 is to make users whole, increase capital efficiency, and attract new liquidity to the protocol. Writing off the debt and rewarding nodes and DLPs that stay with the protocol aims to make THORChain whole and functioning once more.
Interested parties will be watching how the price of RUNE reacts to the overall market and how swiftly the THORChain can deliver on the promises made in Proposal 6.
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The post What’s Going on With THORChain? Rune Price A Bloody Mess – Can Proposal 6 Save It? appeared first on 99Bitcoins.