THORChain Converts $200M Debt into Equity with New TCY Token Initiative

THORChain has moved forward with “Proposal6,” a plan to address its $200 million debt by converting it into equity via the creation of a new token, TCY (Thorchain Yield). The total supply of TCY will be limited to 200 million tokens, with each token distributed at a rate of 1 TCY for every dollar of defaulted debt, allowing affected lenders and savers to become equity owners in the project.

This decision follows the suspension of THORFi services on January 23, triggered by financial instability, as previously reported by CoinDesk.

As part of the initiative, THORChain will establish a RUNE/TCY liquidity pool with $500,000 in initial funding, priced at $0.1 per TCY, and backed by $5 million from the project’s treasury.

TCY token holders will also receive 10% of THORChain’s ongoing revenue, providing a long-term recovery mechanism for those impacted by the debt situation. However, the precise timeline for full recovery remains unclear.

Despite the ongoing financial restructuring, THORChain’s core cross-chain swapping services remain operational. The platform’s native token, RUNE, has seen a 10% decrease in value over the past 24 hours, contributing to a nearly 50% loss over the past month amid broader market declines.