MakerDAO, the Dai stablecoin issuer, passed a governance proposal to remove renBTC as collateral and reduce exposure to what the DAO considers a risky asset.
RenBTC is a bitcoin-wrapped asset created by the Alameda Research-backed project Ren Protocol.
Users can mint the dai stablecoin by depositing excess cryptocurrency collateral with MakerDAO. MakerDAO will allow users to deposit renBTC tokens in specialized “RENBTC-A” vaults and mint dai in December 2020.
Alameda Research, the sister trading firm of the FTX exchange, acquired the Ren project earlier this year and has been funding its development quarterly.
Following the bankruptcy of Alameda and the FTX exchange, the Ren team announced that its existing tokenized bitcoin offering, known as Ren 1.0, would be phased out and replaced by a new community-run Ren 2.0.
The Ren team stated that it had a runway to complete by the end of the year.
Meanwhile, renBTC issuance has been suspended, and users have been instructed to burn any circulating tokens on Ethereum and claim them back to the original chain.
It was also stated that the team would require additional funding to complete this second version of Ren.
In response to this development, MakerDAO’s “risk core unit” team stated that because mints had been disabled, renBTC could potentially lose its pegged value to bitcoin.
It then proposed that the renBTC vaults be closed and the loan positions be liquidated.
The vote on this proposal was passed on November 24, with 100% of MakerDAO delegates voting in favor.
“With Alameda declaring bankruptcy and the increased risk of renBTC depegging, we support offboarding renBTC as collateral to reduce risk to the platform,” said London Business School Blockchain, a MakerDAO delegate.