Alameda Bankrupted Bitcoin Tokenizer to Print Ren For Bailout

renBTC, a project that tokenized bitcoin on ethereum in a somewhat decentralized protocol manner, is suddenly in financial difficulties following the bankruptcy of Alameda.

That’s because this ‘decentralized’ project had their team bought out last year by the now bankrupt Alameda, so they’re left without salaries or any money to continue.

“Ren assets need to be bridged back to the respective native chains as soon as possible,” the project said. “The Ren 1.0 network is likely to imminently shut down, and any remaining assets are at risk of being lost.”

The ren 1.0 project is apparently somehow Alameda, so instead of transitioning that to ren 2.0, they seemingly want to keep ren 2.0 ‘clean’ and sort of start anew.

The testnet for ren 2.0 is to launch soonish, with the project so hoping to then launch a mainnet and continue like nothing happened.

Yet they need money with it unclear where all the funds Alameda paid went, or indeed how much they paid at all.

There are in addition some $72 million worth of Ren tokens in circulation, and presumably much of that went to these project developers, but it may have been spent as Maximilian Roszko, who describes himself as Ecosystem Advocate at Ren protocol, says:

“The proposal is that the Ren DAO will vote on whether to mint new REN tokens to the Ren Foundation, and decide how much to be minted in that case, to be used for funding development and ecosystem growth.”

They may mint between 50 million to 200 million ren. At 100 million ren, that would amount to $7 million at current prices.

Making it small sums, but at 200 million ren, it would amount to newly issuing 20% of the entire ren supply.

More importantly this episode indicates this project is still not decentralized. Back in 2020 when it first came out, although their literature would describe it as decentralized, it was revealed it was actually “semi-centralised.”

The fact Alameda could buy them out indicates that semi-centralized structure continued in 2021, and now the shutting down of the v1 protocol completely indicates it still remains the case in this 2022.

If the Ethereum Foundation disappeared for example, or somehow became bankrupt, the ethereum blockchain would not become inoperational. Instead it would keep running as if nothing happened.

The structure and protocol development maybe would be frozen or would slow down considerably, but some might say that would be a good thing especially as the main development has now moved to second layers which are largely being coded by projects outside of EF.

This is the case for ethereum because there is no central point upon which the system depends. For ren, however, they have API calls to the blockchains, and someone needs to run them. In addition, just how they handle custody in a decentralized manner was never quite clarified.

Nonetheless it managed to tokenize some 26,000 bitcoin at one point, worth half a billion. Now it is down to just 700 bitcoin as v1 shuts down.

The lesson here being that some cheap money from Alameda to ren their Solana was probably not worth it, while decentralization in this case is priceless, but probably too hard.

Though they’re doing a take two, so who knows, maybe this new $7 million self-bailout will get them there.