Ren had received quarterly funding from defunct trading firm Alameda Research since early 2021 before Alameda’s bankruptcy filing earlier this year.
Alameda’s failure has left it with insufficient funds to continue beyond Q4 2022.
RenDevelopment needs additional funds
Ren needs the additional money to proceed with the development of Ren 2.0 after announcing that they would sunset the Ren 1.0 network. The original network was previously under Alameda’s control. In a blog post, the protocol said it would share potential ways of securing additional funding with its community. It would later put the decision to a formal governance proposal.
The Ren Protocol aims to bring additional liquidity to decentralized protocols by enabling the transfer of assets across multiple blockchains, including the most active ecosystems like Ethereum, Solana, and Polygon. For example, it allows you to convert Bitcoin to renBTC, an ERC20-compliant token you can bridge to Ethereum to use in decentralized finance applications like Uniswap.
Ren 2.0 will allow developers to build generic decentralized application logic on top of Ren. It will also provide an improved multi-party computation algorithm for signing transactions and improve REN tokenomics. The native token has a fixed supply of 1 billion, with the majority held on exchanges Coinbase and Binance. Coinbase holds 172 million, while Binance holds 166 million.
Ren dealt a blow as MakerDAO pulls support for renBTC
Decentralized autonomous organization (DAO) MakerDAO has voted to remove renBTC’s status as good collateral for minting the DAO’s USD-pegged stablecoin DAI. DAI is minted by pledging Ethereum-based tokens as collateral through a smart contract called a Collateralized Debt Position. MakerDAO will liquidate a user’s collateral if its value falls below a certain threshold.
With the Ren Protocol’s future hanging in the balance, the community has removed renBTC’s status as approved collateral. This is because many users could get liquidated if the value of renBTC is not enough to cover their positions.
The acquisition of asset transfer protocol would see Binance CEO Changpeng Zhao taking one more step towards fulfilling the role of industry savior after the collapse of the Bahamian exchange FTX. Binance recently launched a $2 billion recovery fund for struggling crypto firms. It also introduced an internal insurance fund of about $940 million for customers with assets on its platform.
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.