Transaction Volume on THORChain Surges Past $1B After Bybit Hack

THORChain’s transaction volume skyrocketed to $874.11 million on February 27, pushing its 48-hour total past $1 billion as per data from Defillama.

This surge in volume is an all-time high for the protocol, which previously faced backlash in January after reportedly pausing Bitcoin and Ethereum lending services. The pause was due to a $200 million debt crisis.

Why is THORchain Surging?

The surge in activity on the decentralized platform coincides with the $1.4 billion Bybit hack. The Lazarus Group, a North Korean state-sponsored hacking group responsible for the breach, exploited a security flaw in Bybit’s multi-signature approval process on February 21, draining 499,000 ETH from the exchange.

However, blockchain analysts later discovered that the hackers were laundering approximately 20% of the stolen funds through THORChain’s cross-chain swap feature. Concerns arise that the protocol could facilitate money laundering. However, exchange leadership dismissed these allegations, claiming it doesn’t permit money laundering.

Pluto, a core THORChain developer, admitted illicit funds moved through the protocol but highlighted implemented measures to help wallet and integration partners screen transactions. He further argued that THORChain’s decentralized nature shouldn’t bear responsibility for user activity.

RUNE Price Equally Surges, Sees 36% Rally

Amid the controversies, THORChain’s native token RUNE also surged by 36% in 7 days, moving from $1.18 to $1.64 according to data from CoinMarketCap. The surge in RUNE’s price is signaling a potential trend reversal after a nearly 70% price collapse between December and February.

Key indicators show rising buying pressure, suggesting traders are cautiously confident of THORChain’s recovery. Analysts speculate that the increased protocol usage—legitimate or otherwise— is good for THORchain as it has bolstered demand for RUNE.

However, while THORChain’s transaction volume recent upturn is positive news for the short-term, its long-term sustainability is questionable. The protocol’s continued success hinges on resolving its debt crisis and rebuilding trust within the community.

Furthermore, the protocol’s ability to address ethical concerns concerning the illicit use of its platform for money laundering while maintaining its decentralized ethos will set a precedent for other DEX platforms in the future.