CryptoEddy
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My understanding of what's going on with $RUNE right now:
- Validators have used a multikey to pause Thor Lending repayments.
- Regular cross-chain DEX operations of Thorchain remain functional -- nothing else of than *Lending repayment specifically* is impacted.
- Why? Repayments mint $RUNE (to buy back collateral), which depresses $RUNE, which scares more loan-holders into repaying, which mints more $RUNE to sell for collateral redemption, etc.
- The fear is that a run on the $RUNE redemptions will be catastrophic.
- Will it? The size of Thor Lending is pretty small compared to the rest of the chain functions -- it could probably actually handle a full run at present, all things being equal. (There is debate on this, but my guess is that this statement is true)
- ... But if Bitcoin price suddenly jumps to say $500K, that means it's now 5x the $RUNE (at current price) that must be minted and sold to buy the collateral to return to the loan repayer. THAT might be too much for the system to handle.
- So. The idea is to pause things so as not to interrupt the cross-chain DEX part of Thorchain, which is working great and is very profitable, and restructure the Lending on Rujira, the upcoming, side-chain DeFi app layer of Thorchain.
I am all for this idea, I think it's wise to pause it for system and chain safety.
- Validators have used a multikey to pause Thor Lending repayments.
- Regular cross-chain DEX operations of Thorchain remain functional -- nothing else of than *Lending repayment specifically* is impacted.
- Why? Repayments mint $RUNE (to buy back collateral), which depresses $RUNE, which scares more loan-holders into repaying, which mints more $RUNE to sell for collateral redemption, etc.
- The fear is that a run on the $RUNE redemptions will be catastrophic.
- Will it? The size of Thor Lending is pretty small compared to the rest of the chain functions -- it could probably actually handle a full run at present, all things being equal. (There is debate on this, but my guess is that this statement is true)
- ... But if Bitcoin price suddenly jumps to say $500K, that means it's now 5x the $RUNE (at current price) that must be minted and sold to buy the collateral to return to the loan repayer. THAT might be too much for the system to handle.
- So. The idea is to pause things so as not to interrupt the cross-chain DEX part of Thorchain, which is working great and is very profitable, and restructure the Lending on Rujira, the upcoming, side-chain DeFi app layer of Thorchain.
I am all for this idea, I think it's wise to pause it for system and chain safety.
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FTX WILL START PAYING $16 BILLION
IN CLAIMS FROM 3RD JANUARY 2025
FTX WILL START PAYING $16 BILLION
IN CLAIMS FROM 3RD JANUARY 2025
Just don't panic in every red market. It's just another chance for all of us.
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