MakerDAO, the creator of Dai Stablecoin, approves a governance motion to remove the use of renBTC as collateral. Its objective is to reduce exposure to what the DAO considers a risky asset. The Ren Protocol project, sponsored by Alameda Research, is the developer of RenBTC, a wrapped bitcoin asset.
Bankruptcy of FTX and Alameda affects the Ren project
By depositing excess cryptocurrency as collateral, MakerDAO users could create stablecoin dai. As of December 2020, MakerDAO allowed users to place renBTC tokens in custom Dai mint vaults “RENBTC-A”. On the other hand, Alameda Research, the sister trading organization of FTX Exchange, is the one that owns the Ren project. Earlier this year, she purchased the project and sponsored its development on a quarterly basis.
However, a few weeks ago, Alameda and FTX Exchange filed for Chapter 11 bankruptcy protection. Following this blow, Ren’s team announced that its current tokenized bitcoin offering, known as Ren 1.0, would remain closed. However, it will be replaced by a new Ren 2.0, this time managed by the community.
The Risk Core Unit offers radical solutions
MakerDAO’s Risk Core Unit reacted quickly to this decision. Indeed, it indicates that due to the closure of currencies, the renBTC risked losing its value pegged to bitcoin. As a result, she is offering as a solution to close the renBTC vaults and liquidate her loan assets.
Yesterday, proposal received a unanimous positive vote from all MakerDAO delegates, and was approved. Normally, several renBTC vaults on Maker are currently over 850,000 Dai in credit. The vote directs that the liquidation of these objects begin on December 7th.
In short, Maker governance wants to eliminate vault type RENBTC-A due to the unpredictability of the Ren protocol. Thus, in accordance with the opinion of the Risk Core Unit, all possible solutions are put in place for the success of the operation.
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