THORChain Revolutionizes DeFi with Automated Solvency Checks

THORChain has implemented an innovative system to ensure the solvency of its vaults. The protocol continuously runs checks across all connected chains, comparing expected balances with actual on-chain wallet balances. This process happens in real-time, without any manual trigger or external intervention.

If a node detects a discrepancy of more than 1% between expected and actual balances, it flags the issue. However, a trading halt is only triggered if more than 66% of nodes agree on the discrepancy. This supermajority requirement ensures that the system avoids false positives and false negatives.

The halting mechanism is entirely automated and cannot be activated by external parties requesting specific funds to be frozen. This design choice reflects THORChain's commitment to decentralization and autonomy, even in the face of potential regulatory pressure.