THORChain launches new proposal to destroy US$300 million worth of RUNE to expand lending scale
THORChain has proposed a new improvement proposal (ADR 012) on its official GitLab page, aiming to expand THORFi's lending business and destroy the backup reserve. According to the proposal, since the launch of the lending business in the third quarter of 2023, a total of 1,300 loans have been opened, involving approximately $24 million in collateral, and $7 million in debt has been issued. Currently, the system risk is low, and only 700,000 RUNE will be permanently destroyed in a complete liquidation scenario.The proposal suggests setting the maximum collateral ratio (MAXCR) to 200% and destroying 60 million RUNE in backup reserves. This move aims to reduce lending risks and safely increase lending leverage. Lowering MAXCR to 200% will allow more loans to be issued, and the possibility of loans being closed during a bear market will be reduced. In addition, by destroying approximately $300 million worth of RUNE, THORChain can absorb an additional $100 million in collateral and increase market demand for RUNE.The proposal also mentions that destroying backup reserves can not only create space for the expansion of the lending business but also help introduce new features such as stablecoins and perpetual contracts in the future.
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