What is Ren?
TL;DR: Ren is a protocol that enables private transfer of value between blockchains. Starting with BTC, BCH and ZEC, the goal is to bring cross-chain assets to Ethereum. Ren is essentially a decentralized version of WBTC. The mainnet is just weeks away.
Originally, in 2017, the team started building a decentralized dark pool (an exchange where the order book is hidden) but decided later to focus on interoperability.
How is Ren used?
Any app on Ethereum can use Ren’s interoperability layer in their smart contracts. Devs can build Ethereum smart contracts that utilize cross-chain liquidity and make use of non-Ethereum assets (starting with BTC, BCH, and ZEC) like any other ERC20 token.
How does Ren work?
Ren’s core product is the RenVM — a BFT protocol secured by nodes. RenSDK makes it easy for apps to integrate the protocol. RenVM is used as a trust-minimized custodian that takes an asset on blockchain X and mints it as an ERC20 on Ethereum (1:1 ratio).
RenVM uses a modified version of the Tendermint consensus algorithm designed specifically for secure multiparty computation. The state (asset type, transfer amounts) inputs / outputs of RenVM are kept hidden from everyone, even the nodes that power it.
Moving assets between chains
An address on the guest blockchain (e.g. Bitcoin blockchain) is created by RenVM:
i) BTC is moved to this address ii) RenVM takes custody of BTC iii) RenVM mints a representation of BTC onto the host blockchain (ERC20 representation of BTC on Ethereum).
Moving assets back
When moving BTC from Ethereum back to Bitcoin blockchain, the renBTC on Ethereum is burnt and an appropriate amount of funds is released by the RenVM to the associated Bitcoin address (address specified by the user who initiated the burn).
Nodes (“darknodes”) need to bond REN (100,000 REN, ~$6000 at current prices) for the right to secure the network. Nodes get a small percentage of the liquidity that moves through the protocol as fees (currently 0.1%, adj. by vote). There’s a fixed supply of 1B REN.
Active nodes get rewarded every four weeks. Nodes that are inactive for more than 24h can be blacklisted by other nodes (=deregistered). The node that notices malicious behaviour and slashes gets a portion of the bond — the rest is burned.
A bribery attack is not profitable as long as the sum value of all REN bonds is 3x the value of origin assets locked. This constraint is enforced economically by adjusting the minting, burning, and continuous fees.
The Ren protocol is initially governed by the core team in order to maintain a level of central control upon launch (this means that the core team can quickly react to bugs etc). The governance will eventually be moved to the REN tokenholders.
i) tBTC uses collateral to ensure funds are safe. ii) WBTC utilizes a multi-sig among centralized custodians. iii) Atomic Loans issues stablecoins (DAI, USDC) collateralized by BTC, instead of an ERC20 representation.
The testnet (Chaosnet) — an unrefined release of RenVM — was launched in mid 2019. The mainnet is in its final stages of audit (ETA upcoming weeks). ChaosDEX is a DEX built on the testnet where real assets are utilized. Stats here.
New assets in the pipeline:
RenVM is being integrated/ren-assets will be used by projects such as Aave, Authereum, Curve Finance, etc. Projects such as Kyber, Polychain, Totle are helping guarantee RenVM’s safety by running nodes in the first phases of mainnet.
Token Terminal provides financial and business metrics on crypto protocols — metrics we’re used to seeing applied to traditional companies, e.g the P/E ratio. Crypto protocols operate like traditional businesses, only they do it directly on the Internet.
The authors of this content, or members, affiliates, or stakeholders of Token Terminal may be participating or are invested in protocols or tokens mentioned herein. The foregoing statement acts as a disclosure of potential conflicts of interest and is not a recommendation to purchase or invest in any token or participate in any protocol. Token Terminal does not recommend any particular course of action in relation to any token or protocol. The content herein is meant purely for educational and informational purposes only, and should not be relied upon as financial, investment, legal, tax or any other professional or other advice. None of the content and information herein is presented to induce or to attempt to induce any reader or other person to buy, sell or hold any token or participate in any protocol or enter into, or offer to enter into, any agreement for or with a view to buying or selling any token or participating in any protocol. Statements made herein (including statements of opinion, if any) are wholly generic and not tailored to take into account the personal needs and unique circumstances of any reader or any other person. Readers are strongly urged to exercise caution and have regard to their own personal needs and circumstances before making any decision to buy or sell any token or participate in any protocol. Observations and views expressed herein may be changed by Token Terminal at any time without notice. Token Terminal accepts no liability whatsoever for any losses or liabilities arising from the use of or reliance on any of this content.
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