Ren is at a crossroads and its survival is very much in doubt without a new strategy. The issues are well known and include the following:
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Ren has almost no treasury and cannot finance itself past December. The Community Fund holds approximately 50k USD.
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IP ownership is not clear. What rights does the community have to build on top of Ren, when all assets and IP were sold to Alameda in 2021? And nobody seems to have any clue about the composition of that agreement!
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There is a void of leadership. Ren Labs are working as outsourcers to Alameda, invoicing approximately 700k USD per quarter to pay 10 people to maintain and develop on Ren. However, it’s not clear what legal rights we have as a community to own that work. Also, Ren Labs is not really working as leaders of Ren itself. That was quite evident on the last community call. They are first and foremost outsourcers, not properly motivated to lead Ren. I’m not doubting their commitment, simply pointing out the obvious.
On the Nov 15th community call, Ren Labs said it cannot continue work on Ren without being paid. That would imply Ren will cease to function in Q1 2023 without a cash infusion. However, even if some money can be scraped together short term, it would be a huge mistake for the community to continue to finance work through the existing model. A completely new approach is required, one that is community led. I would suggest the following:
Create a Turnaround Team.
This should be a small team of people who will lead efforts to rebuild Ren. This team should have perhaps 5-7 members, but 2 key leaders: an acting “CEO” type empowered to make quick decisions, and a “CFO” type who will help manage funds. The remaining team members will assist as required, and also form the core of the treasury multi-sig.
Pay 100% of DNO Rewards to the Treasury.
Currently 7.12% of fees go into the Community Fund (de facto treasury) each epoch. This is not nearly enough! This should be increased to 100% for the foreseeable future. Goal is to build up a proper treasury and generate a long-term run rate to finance the project. After a reasonable time frame, the 100% tax can be reduced to, say, 50%, or whatever number is deemed acceptable to ensure financial security for the project, long term. But short term, all fees much go into the treasury!
Assuming 100% paid into the treasury, and using numbers from the previous epoch, it’s possible to see 250k USD per month moved into the community treasury. That will give us around 3 million USD over one year, minus expenses. Ren Labs confirmed on the last call they have expenses of around 700k per quarter, which is more or less 3 million USD over one year. I’m sure we can dramatically reduce these costs, as well. But long story short: Ren can survive, but only if it uses all funds generated by DNOs, at least throughout 2023.
Hire an Experienced Web3 Lawyer
The community needs to understand its legal rights before it makes too many critical decisions. Ren Labs is saying they can outsource the software (apparently Ren 1.0 and 2.0, at least based on the community call). Is this based on something written, or just conversations with Alameda? What, for example, is in the outsourcing agreement between Ren Labs and Alameda regarding IP? If we don’t have anything written down, I’m extremely skeptical we can simply outsource software and not expect legal clawbacks later. I think it’s critical we hire a lawyer to help us work through a number of legal issues as the community takes over direct management of the protocol. IP ownership is just one facet, there will be many other issues in which a lawyer will be key.
To give one extreme example, we may learn there is no way to retain IP ownership of Ren within its existing legal structure because of the Alameda mess, and a radical new approach will be required. But better to learn that now than in 2-3 years, when it will be impossible to change.
Community Must Take Direct Control of Greycore
The 13 nodes that make up of the existing Greycore must be put under Ren community control, once the legal review is complete. I am assuming Greycore is under Ren Lab’s control now, which is rather absurd if you think about it! An outsourcer to Alameda controls Greycore! This must be managed by the community to help restore confidence in RenVM across the wider wider ecosystem. We need to restore confidence in RenVM and completely sever all ties with Alameda. The community taking direct control over Greycore is the key step.
Conduct a Thorough Code Review
How close are we to the vision of Ren 2.0, a fully decentralized network of darknodes? I’ve heard we’ll see Ren 2.0 in Q1, is that realistic? What is the roadmap, and what are the key assumptions on that roadmap? How much development effort is required to complete this? What is the performance of work done to date on Ren? All of this should be understood in detail. From there we can discuss required resources and budget to get us to Ren 2.0.
Ren Labs can continue to play a key role in future development, but this should be done under the control of the Ren community, based on a clear mandate, accountability, and full transparency. With funding tightly controlled by the Ren community.
I’m sure there will be many, many other issues that come up, which is why the Turnaround Team is so important. We don’t have time to discuss every little issue, this is a turnaround situation, and we must move quickly and decisively. This team is crucial so we can properly execute. Also, we must secure all darknode fees asap, that is our only source of revenue! Every month matters, an emergency vote should be done asap to ensure this epoch’s rewards remain in the Ren treasury.
This problem is not going to fix itself. The situation is serious and acute. We are almost out of money. Development will end soon. Without quick and decisive action, Ren will fail. The market is slowly waking up to the fact Ren assets may not survive this Alameda fiasco. Things will start to accelerate soon. The time to act is now…