THORChain to Convert $200M Debt into Equity with New TCY Token Distribution
THORChain has announced a plan to convert nearly $200 million of its unmanageable debt into equity through a new token, TCY (Thorchain Yield). The total supply of TCY tokens will be capped at 200 million, and the distribution will follow a rate of 1 TCY per dollar of defaulted debt. This decision comes after members passed “Proposal6,” which enables lenders and savers to become equity holders in the project.
The move follows the suspension of THORFi services on January 23, as reported by CoinDesk, due to ongoing financial challenges faced by the platform.
The new TCY tokens will be distributed to affected parties, and THORChain plans to create a RUNE/TCY liquidity pool with an initial funding of $500,000 at a price of $0.1 per TCY. The pool will be backed by $5 million from THORChain’s treasury.
As part of the recovery strategy, TCY holders will receive 10% of THORChain’s revenue on an ongoing basis. This long-term incentive is aimed at compensating those impacted by the debt crisis, although the full timeline for financial recovery remains uncertain.
While THORChain faces challenges, its core cross-chain swapping services remain operational. The price of THORChain’s native token, RUNE, has fallen by 10% in the past 24 hours, continuing a broader market decline, which has led to a near 50% loss over the past month.
