Thorchain issues 200 million dollars equity token to resolve Thorlend Debt Crisis

Congratulations Thorlend Depositors : you are now owners.

My short summary: my interpretation of the Podcast and Articles.

Thorchain will issue 200 million TCY tokens as reimbursement for Thorlend and Thorsavers 200 million dollar losses.
Investors who had tokens like Bitcoin or Ether in Thorlend or Thor savers will not get their tokens back. They will receive TCY token, valued at one dollar, dollar for dollar for the snapshot date value of their Lend Account or Sabers Account.
This token will entittle holders to 10% of Thorchain revenues for perpituity.
It is important to realize you can't sell this token right away to recover your dollars lost.
Thorchain will create a trading pair and liquidity pool TCY/Rune, but the value of TCY
So selling it immediately will result in a 90% loss.
But it provides a market for people to cash out at a loss, who wish to, and provides a potential 10x upside to those willing to take a longterm position in Thorchain, plus 10% of Thorswap revenues.

Thorchain.org has a Podcast announcing Proposal 6 being passed and explains the proposal

Link

https://thorchain.org/

Acording to news reports at CoinMarketCap, CoinDesk and others: you will be given tokens entittling you to 10% of the earnings on Thorswap for perpituity.

You will receive this equity in ThorSwap in lieu of your Bitcoin, Ether and other token deposits.
Thorchain will sell 200 million tokens for 1 dollar each, and create a liquidity pool for this token and rune, where trading can be done: TCY/RUNE.
The Thorchain community by these reports below, has already voted on the proposal and approved it.

News Reports

Per Coinmarketcap News services

THORChain Plans to Overcome $200 Million Debt Crisis by Issuing TCY Stock Tokens.

The community has voted on the proposal and apparently it has passed by a wide margin.

The majority of THORChain’s validators have accepted governance proposal 6, demonstrating community consensus on how to deal with the nearly $200 million debt crisis that has arisen in the protocol.

Details

THORChain has suspended THORFi services, including its “Savings and Lending” programs, due to financial uncertainties. A 90-day restructuring plan is in place to address and mitigate issues resulting from unserviceable debts accumulating in these programs.

The plan, approved by the community, is to convert debt into equity, specifically a new token called TCY (Thorchain Yield) with a supply of 200 million.

This means that instead of repaying loans in bitcoin or ether, lenders and savers will receive TCY tokens, effectively converting their loan requests into equity within the Thorchain ecosystem.

TCY holders will be entitled to receive 10% of Thorchain’s revenue forever. “THORChain will convert $200 million worth of debt into equity through a new token that will receive 10% of the network revenue in perpetuity,” the THORChain team said.

The proposal involves minting 200 million TCY tokens, distributed at a rate of 1 TCY for every dollar of defaulted debt. The core team is expected to create a RUNE/TCY liquidity pool with $500,000 in liquidity at $0.1 per TCY, funded by $5 million from the treasury.

This means that for those with money in Thorchain’s lending and savings programs (ThorFi), their assets will be converted to TCY rather than being paid back in the original asset, although it remains unclear how long the recovery will take.

Other takes on this issue: CoinDesk Article

What to know:
TCY will be distributed at a rate of 1 TCY per dollar of defaulted debt.
The move comes after THORFi paused bitcoin and ether withdrawals a few weeks ago.

THORChain's members passed “Proposal6” to convert nearly $200 million of unserviceable debt into equity via a new token, TCY (Thorchain Yield), with a total supply of 200 million tokens.

This action was taken after suspending THORFi services on Jan. 23 due to financial uncertainties, as CoinDesk reported.

TCY tokens will be distributed at a rate of 1 TCY per dollar of defaulted debt, turning lenders and savers into equity holders. THORChain plans to establish a RUNE/TCY liquidity pool with $500,000 starting at $0.1 per TCY, funded by $5 million from the treasury.

Holders of TCY will receive 10% of THORChain's revenue indefinitely, providing a long-term incentive and recovery mechanism for those affected by the debt crisis — although the timeline for total financial recovery remains uncertain.

THORChain's cross-chain swaps, its main service, remain unaffected. Prices of the platform’s native RUNE are down 10% in the past 24 hours alongside a broader market fall, extending 30-day losses to nearly 50%.

Sources

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