The developers of THORChain have put forth a community proposal to burn approximately $300 million worth of RUNE tokens, aiming to enhance lending activities on the platform.
In a proposal published on January 30, THORChain developers suggested burning 60 million RUNE tokens, equivalent to around $300 million at the current market value, from the Standby Reserve fund. This represents 12% of the max supply of RUNE and is intended to create space for additional loans on THORChain.
The initiative’s description states, “By burning ~$300 million in RUNE from standby, it means THORChain can onboard another $100 million in Collateral (33% Lending Lever), which is a $50 million market-buy on RUNE (200% collateralization ratio).”
A THORChain developer, identified as @Pluto9r, shared in a post that the proposal positions the project for a “real shot at being the world’s deepest BTC pool,” urging community support.
However, there is some confusion within the THORChain community regarding the potential consequences of the proposal. While some members express concerns about how burning nearly $300 million worth of RUNE would enhance lending capacity, others are hesitant to support a lending design based on certain assumptions.
In response to the community’s queries, THORChain justified the burning of 60 million tokens, emphasizing that it would make “all outstanding RUNE notionally more valuable.” As of now, the proposal continues to generate ongoing discussions within the THORChain community as participants assess the potential benefits and risks associated with the suggested token burning.
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