A new proposal from THORChain aims to destroy $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 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 about $24 million in collateral used to issue $7 million in debt. The current system risk is low, with only 700k RUNE being permanently destroyed under full liquidation scenarios. The proposal suggests setting the maximum collateral rate (MAXCR) at 200% and destroying a reserve of 60 million RUNE. This move aims to reduce borrowing risks and safely increase leverage. Lowering MAXCR to 200% will allow more loans to be issued and reduce loan closure possibilities during bear markets. In addition, by destroying approximately $300 million worth of RUNE, THORChain can absorb an additional $100 million in collateral increasing market demand for RUNE purchases. The proposal also mentions that destroying reserves not only creates space for expanding lending operations but also helps introduce new features such as stablecoins and perpetual contracts in future.