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By Shaurya Malwa|Edited by Parikshit Mishra
Jan 24, 2025, 7:01 a.m. UTC
Interblockchain settlements protocol THORChain paused bitcoin (BTC) and ether (ETH) withdrawals on its lending and savers programs to prevent a potential insolvency risk.
Network node operators proposed and implemented a 90-day pause in early Asian hours on Friday, to formulate a plan to resolve debts, messages from THORChain’s Telegram channels show.
THORChain’s lending program only has BTC and ETH, but its saver vaults support more assets.
A potential insolvency situation could be created if all loans and savers positions were closed and repaid at exactly the same time, and if market sentiment also caused a steep decline in RUNE.
THORChain meets its lending obligations by minting RUNE and selling it into liquidity pools. As such, deposits had been turned off a year ago as the community became increasingly concerned with the risk at the time.
Some community members allege liabilities of nearly $200 million. Of that, some $107 million is contained in liquidity pools, which could be withdrawn or sold by liquidity providers (LPs) or RUNE holders in case of panic.
THORChain’s cross-chain swaps – its main service – remain unaffected. Users can still perform swaps and utilize liquidity pools without disruptions.
Shaurya is the Co-Leader of the CoinDesk tokens and data team in Asia with a focus on crypto derivatives, DeFi, market microstructure, and protocol analysis.
Shaurya holds over $1,000 in BTC, ETH, SOL, AVAX, SUSHI, CRV, NEAR, YFI, YFII, SHIB, DOGE, USDT, USDC, BNB, MANA, MLN, LINK, XMR, ALGO, VET, CAKE, AAVE, COMP, ROOK, TRX, SNX, RUNE, FTM, ZIL, KSM, ENJ, CKB, JOE, GHST, PERP, BTRFLY, OHM,
BANANA, ROME, BURGER, SPIRIT, and ORCA.
He provides over $1,000 to liquidity pools on Compound, Curve, SushiSwap, PancakeSwap, BurgerSwap, Orca, AnySwap, SpiritSwap, Rook Protocol, Yearn Finance, Synthetix, Harvest, Redacted Cartel, OlympusDAO, Rome, Trader Joe, and SUN.
