MakerDAO Approves Proposal To Remove renBTC As Stablecoin Collateral
The sibling trading company of the FTX exchange, Alameda Research, bought the Ren project earlier this year and has been funding its advancement on a quarterly basis.
The Ren team announced that its current tokenized Bitcoin product, referred to as Ren 1.0, will be shut down and replaced by a new community-run Ren 2.0 when Alameda and the FTX exchange filed for Chapter 11 bankruptcy protection.
The team said that all that was needed was to finish the runway before the end of the year. Users are being urged to burn any circulating Ethereum tokens to claim them back to the original chain while renBTC issuance is postponed.
The team will need to seek extra financing to complete this second version of Ren, it was said.
MakerDAO’s Risk Core Unit team responded to this move by noting that because mints were shut down, renBTC may be at risk of losing its pegged value to Bitcoin. Then it suggested shutting down the renBTC vaults and liquidating the loan holdings.
RenBTC is a wrapped Bitcoin asset created by the Ren Protocol project, which has the support of Alameda Research.
Users can create the Dai stablecoin on MakerDAO by putting down extra Bitcoin as collateral. Users were able to store their renBTC tokens in customized RENBTC-A vaults and mint dai as of December 2020, thanks to MakerDAO. It said:
“In light of the uncertainty surrounding the Ren Protocol, and following Risk Core Unit’s recommendation, Maker Governance voted to offboard the RENBTC-A vault type.”
Yesterday, the proposal was approved with the unanimous support of all MakerDAO delegates.
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