{"id":43822,"date":"2025-02-12T10:42:48","date_gmt":"2025-02-12T10:42:48","guid":{"rendered":"https:\/\/mycryptomania.com\/?p=43822"},"modified":"2025-02-12T10:42:48","modified_gmt":"2025-02-12T10:42:48","slug":"thorchain-at-crossroads-a-chess-move-or-rune-death-spiral","status":"publish","type":"post","link":"https:\/\/mycryptomania.com\/?p=43822","title":{"rendered":"THORChain At Crossroads: A Chess Move, Or RUNE Death Spiral?"},"content":{"rendered":"<p>THORChain is trying to prevent a crisis. With Thorchain block rewards down 99%, will RUNE price recover or drop even further as validators exit?<\/p>\n<p><span>THORChain allows users to swap tokens across multiple chains. For example, you can swap ETH for BTC cheaply and securely. While this service is still available, the team <\/span><span>expanded<\/span><span> its offerings, introducing token lending and borrowing.<\/span><\/p>\n<p><span> There are harsh lessons from the painful<\/span><span>\u00a0collapse of<\/span><span> Celsius, Voyager, and BlockFi<\/span><span>. And <a class=\"general-link\" href=\"https:\/\/thorchain.org\/\" target=\"_blank\" rel=\"noopener\">THORChain<\/a> had to scramble not to fall into this abyss <\/span><span>in January 2025.<\/span><\/p>\n<div class=\"chart crypto-chart-instance\">\n<div class=\"chart__header\">\n<div class=\"chart__info\">\n<div class=\"chart__info-icon\"><\/div>\n<div class=\"chart__info-name\">&#8211;<\/div>\n<div class=\"chart__info-label\">Price<\/div>\n<div class=\"chart__info-label\">Market Cap<\/div>\n<div class=\"chart__info-value\">&#8211;<\/div>\n<div class=\"chart__info-value\">&#8211;<\/div>\n<div class=\"chart__info-value\">&#8211;<\/div>\n<\/div>\n<div class=\"chart__controls\">\n<div class=\"chart__controls-group\">\n                <button class=\"chart__button chart__button--24h\">24h<\/button><br \/>\n                <button class=\"chart__button chart__button--7d\">7d<\/button><br \/>\n                <button class=\"chart__button chart__button--30d\">30d<\/button><br \/>\n                <button class=\"chart__button chart__button--1y\">1y<\/button><br \/>\n                <button class=\"chart__button chart__button--all-time\">All Time<\/button>\n            <\/div>\n<div class=\"chart__controls-group\">\n                <button class=\"chart__button chart__button--logarithmic\">Log<\/button>\n            <\/div>\n<\/div>\n<\/div>\n<div class=\"chart__container\"><\/div>\n<\/div>\n<h2><span>The $200 Million Debt Restructure<\/span><\/h2>\n<p><span>The team decided to pause Bitcoin and Ethereum lending to salvage the situation and avoid a possible crisis. In addition, they will launch<\/span><span>\u00a0a new token as they restructure a whopping $200 million debt.<\/span><\/p>\n<p><span>To do this, the THORChain community approved \u201cProposal 6,\u201d which will convert nearly $200 million of \u201cunserviceable\u201d debt into equity. The team will issue 200 million Thorchain Yield (TCY) tokens as compensation<\/span><span>. <\/span><\/p>\n<p>Update from last summary:<\/p>\n<p>1) Proposal 6 implementation plan was released for commentary. Mostly well received except for DLP considerations. Implementation plan has been revised (v2: <a href=\"https:\/\/t.co\/6anX3JIqJs\" target=\"_blank\" rel=\"noopener\">https:\/\/t.co\/6anX3JIqJs<\/a>) to allow DLP to choose to leave (lock in losses) or stay to recoup\u2026 <a href=\"https:\/\/t.co\/C6dmfRt0NU\" target=\"_blank\" rel=\"noopener\">https:\/\/t.co\/C6dmfRt0NU<\/a> <a href=\"https:\/\/t.co\/q0hnTsxV0i\" target=\"_blank\" rel=\"noopener\">pic.twitter.com\/q0hnTsxV0i<\/a><\/p>\n<p>\u2014 Runetard     (@therunetard) <a href=\"https:\/\/twitter.com\/therunetard\/status\/1888722500978438175?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">February 9, 2025<\/a><\/p>\n\n<p><span>TCY will <\/span><span>be distributed<\/span><span> to lenders and savers at 1 TCY per USD of defaulted debt. <\/span><span>In a bid to<\/span><span> encourage more participation, TCY holders will receive 10% of THORChain\u2019s revenue in perpetuity.<\/span><\/p>\n<p><span>The result: An 80% plunge in RUNE prices.<\/span><\/p>\n<h2><span>THORChain Drops Block Rewards by 99%<\/span><\/h2>\n<p><span>And it gets worse for RUNE holders, most of who are THORChain validators.<\/span><\/p>\n<p><span>The community voted <\/span><span>once more<\/span><span> to drastically reduce the block rewards distributed to validators from 25,000 RUNE to 2 RUNE per day. <\/span><\/p>\n<p><span>This governance decision and the community\u2019s choice would <\/span><span>either<\/span><span> likely backfire or see the team lauded as geniuses should this maneuver pay off and RUNE recover from the supply shock.<\/span><\/p>\n<p>THORChain nodes voted to remove block rewards <\/p>\n<p>From 25,000 <a href=\"https:\/\/twitter.com\/search?q=%24RUNE&amp;src=ctag&amp;ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">$RUNE<\/a> per day emitted from the Reserve down to 2 per day, eliminating inflation completely<\/p>\n<p>100% of income is now from swap fees, with a deflationary burn of 5% system income <a href=\"https:\/\/t.co\/A3eDAziPnj\" target=\"_blank\" rel=\"noopener\">pic.twitter.com\/A3eDAziPnj<\/a><\/p>\n<p>\u2014 THORChain (@THORChain) <a href=\"https:\/\/twitter.com\/THORChain\/status\/1889319000158462093?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">February 11, 2025<\/a><\/p>\n\n<p><span>The vote means validators now have to contend with a sharp drop in earnings, and many will have to readjust, perhaps even slashing other operational <\/span><span>costs<\/span><span>\u00a0or even exiting. <\/span><\/p>\n<p><span>It may be<\/span><span> similar\u00a0<\/span><span>to what happened when Bitcoin halved its block rewards, forcing a miner sell-off and a purge of \u201cweak\u201d miners.<\/span><\/p>\n<p><span>Admittedly, it is bold and unprecedented, especially considering that, like Ethereum or Solana<\/span><span>, for example<\/span><span>, validators play a crucial role in validating transactions and ensuring the network\u2019s security.<\/span><\/p>\n<p><span>At the end of the day, the decision will prove strategic and possibly be hailed as a chess move toward ensuring long-term sustainability<\/span><span>, but it<\/span><span> remains to <\/span><span>be seen<\/span><span> how validators will react<\/span><\/p>\n<p><span>. If it backfires and they exit en masse, it would be a gamble that only fast-tracked the collapse of RUNE and the THORChain ecosystem.<\/span><\/p>\n<h2><span>DeFi Protocol In The Future: Will RUNE Extend Losses?<\/span><\/h2>\n<p><span>With block rewards eliminated, THORChain is operating in the \u201cfuture\u201d <\/span><span>where,<\/span><span> eventually, even Bitcoin miners and Ethereum validators will be incentivized by the network but from fees whenever they approve a block of transactions. <\/span><\/p>\n<p><span>This model will only pay off assuming protocol demand jumps and there is a promise of more users leveraging the network for swaps<\/span><span>.<\/span><\/p>\n\n<p>(<a class=\"general-link\" href=\"https:\/\/www.tradingview.com\/symbols\/RUNEUSDT\/\" target=\"_blank\" rel=\"noopener\">RUNEUSDT<\/a>)<\/p>\n<p><span>Currently, as the community processes what happened, RUNE reversed gains of February 10 and ticked lower yesterday. Although prices are flat, RUNE is down 80% and trading below the 2024 range, and likely to trend even lower if panic sets in. <\/span><\/p>\n<p><span>The local support is at $1, and bulls need to push above $2 for any chance of prices recovering, at least back to Q4 2024 highs of nearly $7.5.<\/span><\/p>\n<p><strong>EXPLORE:\u00a0<a class=\"general-link\" href=\"https:\/\/99bitcoins.com\/news\/gamestop-gme-roars-9-as-saylor-triggers-bitcoin-rumor\/\" target=\"_blank\" rel=\"noopener\">GameStop (GME) Roars +9% As Saylor Triggers Bitcoin Rumor<\/a><br \/>\n<\/strong><\/p>\n<p><strong><a class=\"general-link\" href=\"https:\/\/discord.gg\/B7Uk6agkqj\" target=\"_blank\" rel=\"noopener\">Join The 99Bitcoins News Discord Here For The Latest Market Updates<\/a><\/strong><\/p>\n<p>The post <a href=\"https:\/\/99bitcoins.com\/news\/thorchain-at-crossroads-a-chess-move-or-rune-death-spiral\/\">THORChain At Crossroads: A Chess Move, Or RUNE Death Spiral?<\/a> appeared first on <a href=\"https:\/\/99bitcoins.com\/\">99Bitcoins<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"<p>THORChain is trying to prevent a crisis. With Thorchain block rewards down 99%, will RUNE price recover or drop even further as validators exit? THORChain allows users to swap tokens across multiple chains. For example, you can swap ETH for BTC cheaply and securely. While this service is still available, the team expanded its offerings, [&hellip;]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-43822","post","type-post","status-publish","format-standard","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/43822"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=43822"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/43822\/revisions"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=43822"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=43822"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=43822"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}