
Erik Voorhees|May 22, 2025 17:59
Bitfinex, after it's hack in 2016, and Thorchain, after its Thorfi lending mechanism blew up earlier this year, both pursued a novel path that is only possible in crypto.
They issued a token, granted to creditors, which was imbued with a share of future profits. This allowed creditors to either instantly get a material portion of their lost funds back, or hold the token for some time and potentially earn *more* than they lost.
See below chart of LEO since the hack... 1 debt token has risen by 8x in less than a decade.
As an alternative to a normal bankruptcy proceeding, it is far superior. Compare Bitfinex's result to Gox.
This method of using a crypto token deserves further study and exploration.
Earnest financial innovation, purely market based, among self-interested parties who don't know or trust each other.
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