title: Freeze RENFIL for Aave V2 ETH Market
status: Proposed
author: 3SE Holdings, @oneski22
created: 2022.11.21
Given the winding down of Ren 1.0 Network the authors advise the Aave DAO to freeze the RENFIL reserve.
Freezing the reserves will allow for withdrawals, debt repayments and liquidations to continue, while blocking any new borrow positions or new supplies.
I see there’s still around $100k in renfil deposited, with $90k of this lend out. While the amount is fairly small, remaining renfil depositors may end up losing all of their money when ren v1 is sunset because the existing interest rate model is insufficient to incentivize repayment or force liquidations within the next 2 weeks. For users with outstanding renfil borrows, the rational course of action may be to wait out the next few weeks of high interest and then buy back renfil on the cheap to close their loans once redemptions are disabled and the token becomes worthless.
Would it make sense to bump up the interest rate model on renfil to ensure all positions get closed or liquidated before the planned shutdown of ren v1 protocol? It looks like 2/3 of the pool is borrowed by a single account that is relatively close to liquidation, so higher borrow costs could potentially bring in a decent amount of liquidity to enable withdrawals.
I think this has not much to do with incentive to repay. If you check on etherscan this account is actually trying to repay but almost all renFIL liquidity has left the chain.
While FIL trades at at 4.4, renFIL “trades” at 13.4.
I don’t think Increasing rates is a good plan here as it will drive these accounts into liquidation faster but they don’t have a way to repay.
There is currently 77k on Ethereum from which 64k is controlled by wintermute $12.84 | renFIL (renFIL) Token Tracker | Etherscan and 1.5k by the treasury. As there’s no way to mint any more there is currently no way to repay/liquidate 22k debt.
Perhaps could make sense to go the Rf 99 path of Fei to ensure the (currently) non redeemable arenFIL is mostly going to the treasury & to incentivize ppl to withdraw and sell on the market to provide liquidity for ppl who need to repay.
Hello, what is the status of this? I have arenfil and would like to be able to withdrawal before the bridge closes.
Perhaps could make sense to go the Rf 99 path of Fei to ensure the (currently) non redeemable arenFIL is mostly going to the treasury & to incentivize ppl to withdraw and sell on the market to provide liquidity for ppl who need to repay.
What do you mean “arenFIL is mostly going to the treasury” ?
It’s a overall tricky situation as Ren wrapped tokens like renFIL face an extremely bad wind down.
As there’s no way to mint any more but only burn liquidity has faded to 50k which is mostly controlled by sth seemingly related to Wintermute $5.70 | renFIL (renFIL) Token Tracker | Etherscan
Seems like they liquidated some accounts so chances are good they liquidate: 0xaee2ae13ebf81d38df5a9ed7013e80ea3f72e39b soon as well making 16k renFIL available to withdraw.
What do you mean “arenFIL is mostly going to the treasury” ?
My thinking was that newly accrued arenFIL will probably be worthless soon(because renFIL will be worthless). So better to have worthless arenFIL on the treasury then at users accounts. So when Rf is set to 99, supply any will be close to 0 so suppliers are incentivized to withdraw. That said the argument no longer makes to much sense as there is currently no more renFIL to withdraw.
Don’t know if you saw: there is some liquidity again(since yesterday) so you should be able to withdraw around 9k now.
It has been drained now
There’s again some available liquidity (~3k(10k$)) and I think the bridge is not yet closed? (At least on renBTC I saw there was still a burn even yesterday)