The Price of the Project That Suspended Bitcoin (BTC) And Ethereum (ETH) Withdrawals Crashed! Here are the Details

THORChain’s local token RUNE, after the network paused borrowing and saving programs for Bitcoin (BTC) and Ethereum (ETH) withdrawal transactions, lost 30% of its value, raising concerns about potential bankruptcy risks.

THORChain Halts Bitcoin and Ethereum Withdrawals Amid Payment Power Concerns, RUNE Down 30%

According to messages from THORChain’s Telegram channels, network node operators proposed and implemented a 90-day withdrawal pause today.

This move aims to prevent a potential liquidity crisis and allow time to create a plan for resolving unpaid debts.

THORChain’s lending program only supports BTC and ETH, but savings vaults have a wider range of assets.

If the protocol were to close all loans and savings positions at the same time, especially if market sensitivity triggers a sharp drop in the price of RUNE, it would face the risk of bankruptcy.

The protocol meets its lending obligations by minting RUNE and selling them to liquidity pools, which were a mechanism of concern in the past. In fact, THORChain had already disabled new deposits a year ago due to increasing risk concerns.

Some community members estimate THORChain’s obligations to be approximately 200 million dollars, with 107 million dollars in liquidity pools.

If liquidity providers or RUNE holders panic and start withdrawing or selling their assets, this situation can further strain the stability of the protocol.

Despite the turbulence, THORChain’s core service of cross-chain swaps remains unaffected. Users can continue to swap and take advantage of liquidity pools without interruption.