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Is Altcoin Going Bankrupt: Bitcoin and Ethereum Transactions Suspended, Price Crashed! - Coin Bulletin
The THORChain (RUNE) price has lost 30% value with the suspension of withdrawal operations.
To prevent borrowing risks on the network, THORChain has suspended Bitcoin (BTC) and Ethereum (ETH) withdrawals for 90 days. This decision was made to prevent a potential bankruptcy situation that could affect the network's lending and savings programs.
The decision was proposed and implemented by node operators of the network and announced on community channels early on Friday.
After this announcement, the RUNE price dropped by 30% to as low as 2 dollars from 3 dollars.
While THORChain's lending program is limited to Bitcoin and Ethereum, savings vaults support a wider range of assets. However, it was mentioned that if all debt and savings positions were closed at the same time and it caused a sudden depreciation of RUNE due to market sensitivity, there may be a risk of bankruptcy in the network.
Bankruptcy allegations for THORChain
It is known that the platform raised funds by minting RUNE to meet its debt obligations and selling it to liquidity pools. Due to this risk, the community had stopped accepting deposits a year ago.
Some community members claim that the network has an obligation of approximately 200 million dollars. Of this, 107 million dollars is in the liquidity pools and is at risk of being withdrawn or sold by liquidity providers or RUNE holders.
THORChain's cross-chain trading services have not been affected by this situation. Users can continue to use liquidity pools and exchange services uninterrupted.
TCB, a community member, claimed that 'It is not possible for THORChain to fulfill its BTC and ETH obligations in the event of a large debt redemption or removal of synthetic assets'.
On the other hand, the community and validators are working on an economic redesign to stabilize the network. John-Paul Thorbjornsen, the founder of THORChain, said that the protocol can comfortably repay its debts after the restructuring, stating, "The protocol generates significant income and can meet its debts."