As RUNE tanks a further 45% overnight, can THORChain turn its fortunes around?

As RUNE holders awake to more bad news and a plummeting token price, with the passing proposal 6 by a super majority, can the troubled cross-chain swapping protocol “get users liquid again?”

THORChain ‘death spiral’

On January 24, CryptoSlate reported that THORChain had suspended Bitcoin and Ethereum withdrawals within its lending and savings programs after reports of a $199 million liability. As the community awaited a restructuring plan to address the protocol’s debts and ensure its long-term viability, RUNE had dropped nearly 30% in value to $1.90. As of the time of writing, RUNE has fallen a further 45% and is currently trading at $1.08, its lowest value since 2020.

“If only someone could have seen this coming,” posted Osmosis cofounder Sunny Aggarwal with the “obviously” rolling eyes emoji.

Crypto educator @CosmosHoss commented, “Looks like [Aggarwal] called the THORChain RUNE death spiral long before it happened—but most ignored him.”

Adding fuel to the fire, founder John-Paul (‘JP’) Thorbjornsen has come under intense scrutiny for potential conflicts of interest and activity managing multiple projects. Meanwhile, influential THORChain node and core contributor TB’s private chat was screenshot and shared on X revealing that despite working hard to save the protocol, he had sold all his RUNE.

“I couldn’t identify the next buyer and validators were going to be selling,” he said, adding, “There’s a bunch of validators that are going to sell. I’m not going to stand there like a dumbass.”

Twenty-six more nodes have since followed suit (around 20% of the network), signaling intent to leave and corresponding to approximately 20 million RUNE potentially gearing up to dump on the market.