On November 21, MakerDAO published a vote in which it was decided to get rid of the collateral expressed by renBTC. The voting was completed in three days, and the results of the vote were unanimous.
💡 renBTC is a Ren bridge token that is designed to transfer digital assets between blockchains (for example, between BTC and Ethereum). Today's risk for renBTC is that the mints have been disabled, because of this, the asset may lose its binding to BTC.
MakerDAO considered that storing reserves in renBTC was now risky, since Ren is closely linked to Alameda Research and it was already known that the Ren 1.0 network would close in 30 days (starting from November 18), and mints have already been disconnected.
According to the offboarding proposal published by the Risk Core Unit, the disabling of mints means that renBTC could potentially depeg while disabling burns means that Maker has a limited time frame to offboard the collateral to minimize potential future complications.
— Maker (@MakerDAO) November 24, 2022
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When Alameda acquired Ren, quarterly financing began. After the collapse of FTX and the beginning of the bankruptcy case, financing for obvious reasons stopped. According to Ren the remaining financing would last until the fourth quarter.
Back in August of this year, Ren announced that they were planning to switch to the new Ren 2.0 network. Today, despite the fact that the company says that the Ren 1.0 network, under the leadership of Alameda, is operational and safe, the team decided to accelerate the transition to its own Ren 2.0 network and end cooperation with Alameda.
“But given that Ren 1.0 was run under Alameda leadership which is now in bankruptcy proceedings, the Ren development team believes it is best to sunset the Ren 1.0 network and launch Ren 2.0 earlier than previously intended, to ensure the Ren ecosystem’s safety and integrity, at the tradeoff of a shorter disruption of service. While the Ren 1.0 network has remained and still remains fully safe and operational, marking this event as the end of the Alameda’s involvement in the project by sunsetting Ren 1.0, safeguards the reputation, integrity, and hence long-term prospects of the Ren ecosystem.” - writes Ren.
It looks like Ren decided to get rid of any connection with Alameda and start the life of the project from scratch. The company even abandoned the former domain, which is now owned by Alameda.
In fact, such a statement confirms MakerDAO's concerns about the reliability of storing reserves in renBTC, rather than talking about the real security and stability of Ren 1.0.
The collapse of FTX brings more and more problems and potential risks to the crypto industry. Let's hope that MakerDAO's operational risk assessment work will bear fruit, and Ren will be able to successfully launch a new network and continue working. We continue to observe!
