The aim of creating the REN coin was to solve the middlemen issue and more, providing users confidential and permissionless transfers, keep reading as we will explain all you need to know about the REN in this in-depth review.
The recent spike in the cryptocurrency market over the past 6 years has drawn interest from around the globe. Though, investors are now focusing more on digitalized assets to profit from their pools. Daily, traders of all kinds transact with varying crypto markets. However, there has been a challenge in the crypto market.
Traders buy in a large and small amount. Although, when traders make a significant crypto transaction, a specific software tracks that transaction and reflects it on the liquidity market.
This software is known as “Whale Alert,” an intelligent program with an algorithm for tracing enormous single cryptocurrency transactions.
Once this tracking is done, the entire community is notified about it, causing a price slippage. Slippage is the abrupt change in the price of a cryptocurrency when it is being filled for a transaction.
REN is a decentralized dark pool trading protocol created on the Ethereum blockchain according to the ERC20 standard. It was previously called the “Republic” protocol and enabled users to seamlessly transfer assets across different blockchains.
Ren allows for inter-blockchain transactions across decentralized dark pools. It provides investors access to over-to-counter transactions (OTC) while ensuring anonymity.
By OTC we mean, the ability of large crypto transactions to be carried out asides from crypto exchanges. Traders are given the privilege to trade very large volumes of a cryptocurrency without affecting the market’s price. OTC transactions are majorly done by very wealthy traders who don’t desire any unpredictable price change.
The protocol was created in 2017 as the Republic protocol but was changed in the year 2019 to REN coin. The founders are two Australians who are currently the CEO and CTO of the REN protocol, respectively. They are Taiyang Zhang and Loong Wang.
While working for Virgil Capital, Zhang realized that investors couldn’t perform OTC transactions anonymously and privately. Doing so would inevitably affect the market and cause a slippage, causing high volatility of cryptocurrencies.
The native token REN is used as the governance token and has its functionalities we’d discuss that further in this review.
While collaborating to form the REN protocol, Zhang and Wang discovered the lack of inter-blockchain exchange. And this was tackled by their protocol update in 2019. Before we proceed, let’s find out what we mean by “dark pools.”
Dark pools are confidential order books that are hidden from the view of the market. They allow users to perform OTC trades anonymously. This keeps the “whale” investors anonymous and inhibits slippages caused by OTC. Access to these pools is limited from the general view as they have their own least acceptances of liquidity.
They provide traders the perfect anonymity needed to perform their transactions without affecting the market. Kraken exchange was one of the first exchanges to create their dark pool in 2015. Dark pools are created to help whale traders stay ahead of the market. Performing a whale trade on any exchange will be reflected on the order books, and the prices will spike. Thus, REN was created using a hidden order book for its transactions.
While using the protocol’s dark pool, there’s no necessity for Know-Your-Customer (KYC). One doesn’t need to trust the integrity of anyone as the pool is autonomous and secure.
Nonetheless, the Ethereum blockchain hosting the REN protocol still had access to the hidden order books created for confidentially. Therefore, they knew they had to create a mainnet that offered users 100% privacy. But how does this work?
Understanding the REN protocol can be a bit confusing to any new user due to its complexity. Wealthy investors can trade their cryptocurrencies without being worried about price slippages and public notice.
The protocol is built upon a network of dark nodes. These nodes use the Shamir-Secret-Sharing algorithm, which divides an order into smaller bits that can’t be regrouped. These bits are then distributed amongst the nodes till the transaction is carried out.
Two smart contracts are integrated within the platform—the Judge and the Registrar. The Judge verifies the transaction through a cryptographic construction call “Zero-Knowledge-Proofs.” The Registrar inhibits the reconstruction of these bits.
RenVM is a decentralized virtual machine created for permissionless end-to-end transactions. It has a separate blockchain and order book of its own for OTC transactions called “SubZero.” The project aimed to provide blockchain interactivity and exchanges. It was deployed in 2020 and supported swapping between tokens that comply with the ERC20 standard.
The RenVM wraps cryptocurrencies from other blockchains using its dark nodes, such that users can access them on its blockchain. It mints these cryptos and provides a 1:1 equivalent value of the tokens.
To store the token in Ethereum, it will be converted to an ERC20 token known as a Ren (crypto name). E.g., BTC minted to become RenBTC.
The minimum required REN tokens to stake for a transaction is 100,000 REN tokens. Charges are placed at this level to discourage intruders.
The mainnet was created for ERC20-supported decentralized applications and also supports other blockchains. It has features called “GatewayJs” and “RenJS” to make it possible to integrate RenVM with other mainnets.
The REN tokens are distributed when a user pays for a transaction. Also, there’s a charge called “bond” to remain in the network. This goes to the “Registrar” smart contract and is repayable but placed to keep malicious intruders away.
The REN crypto poses some great answers to the problems of crypto exchanges. However, it still has several challenges to be considered if you are an investor. So, let’s head over to the advantages and disadvantages of the protocol successively:
Advantages of REN
We have seen a few notable solutions the REN protocol provides. Let’s look into the challenges arising from it.
Challenges of the REN coin:
Ren is one of the complex platforms designed to overcome the barriers to ‘entry and investments’ for decentralized finance projects.
As a protocol, it has advanced algorithms and cryptography enabling Defi projects to fetch foreign crypto assets like Zcash (ZEC) and Bitcoin (BTC) to their various offerings. This aids token swap between two blockchains even without middle steps like using Wrapped versions, Wrapped Ethereum (WETH) or Wrapped Bitcoin (WBTC).
Ren Virtual Machine (RenVM) comprises virtual computers networked to make up the ‘virtual machine.’ The Darknodes are machines that power the network that makes up the RenVM.
Ren charges different fees for its internal operations. Most of these fees are not channeled towards direct profitability. They are distributed to miners as payments. The Ren token ‘REN’ as an ‘ERC-20‘ token also attracts gas fees for powering transactions.
Ren has joined Bitcoin to aid the movement of other coins like DOGE, ZEC, and BCH into the (BSC) Binance Smart Chain and the Ethereum. The team is planning on supporting more blockchains and coins in the nearest future. The aim is to connect (link-up) the whole crypto space.
Ren’s token value immediately after its reception as a decentralized dark pool exchange was for payment of computation and transaction fees in the protocol. It started functioning as a ‘bond’ for Darknode operation after the protocol was rebranded as a ‘Defi interoperability’ protocol.
The 100,000 Ren tokens required for registering and running a Darknode are to stop users with malicious acts from forging identities and running many nodes. The Darknode operators are the receptors of all fees generated through facilitating exchanges. These fees are paid in the converted token and not in REN.
This implies that more users are advised to run Darknodes and that the REN token can only be used in operating a node. Running Darknodes enable users to earn fees in cryptos that are more popular, like ETH and BTC. This certainly will increase the number of users functioning in the Ren ecosystem hence making the Ren Virtual Machine more scalable and secure.
Therefore, Ren becomes more valuable with an increased number of Darknode operators. This, in turn, will influence the market cap and price.
The Republic Protocol in 2018 launched 2 rounds of ICOs (initial coin offerings) for its native token REN. The first ICO was private and occurred towards ending of January 2018, raising around USD 28million.
The second ICO was made public and raised a total of USD 4.8 million. It took place within the first week of February same year, a few days after the first ICO. They sold slightly above 56% of REN’s 1billion total token supply to investors at over 5Cents USD for each token.
This is an ‘Ethereum based’ token launched by Ren Protocol in Feb. 2018 to power its network. It is used to transfer cryptocurrencies between various blockchains. The REN token aims at bringing renowned assets like Zcash and Bitcoin to blockchains (Ethereum). This will enable these popular assets to be included in the multi-chain Defi ecosystem.
When the REN token was launched in 2018, it experienced a price drop from USD 0.08 (8 cents) to USD 3(0.03 cents) in the space of three months. It later increased to a high price of over USD0.13 (13 cents) cents in May of the same year. The following year, it fell again to just USD0.015 (1.5 cents). This is almost one-quarter of the first ICO price of USD 0.053 (5.3 cents).
Bitcoin’s sudden boom between June and August 2019 gave REN a token raise of approximately USD 0.15 (15 cents). The price action of 2020 has witnessed REN settling lower and higher prices. This is an encouraging development for crypto investors.
Image Credit: CoinMarketCap
The Ren team in 2017 built a ‘decentralized’ dark pool for hiding already executed orders inside the Blockchain. They later changed their plan, focusing more on Blockchain interoperability (the ability of different blockchains to co-operate. See OAX Crypto: Find out why this obscure cryptocurrency has been trending in the crypto world.
However, the Ren protocol recently launched a ‘Polygon bridge,’ causing a sudden rise in the token price. Any Ethereum network-based app can use Ren’s ‘interoperability layer’ in their various smart contracts. This serves as a major selling point for REN.
The REN token is used in two ways in its ecosystem. The first is to remit ‘bonds’ to the (Registrar) Smart Contract that manages the Darknodes within the ecosystem. This smart contract maintains the stability and decentralization of the Ren Virtual Machine (Ren VM) protocol. If any user is interested in running a Darknode, he must pay 100,000 REN as a bond to the Registrar’.
Users also use REN in settling order trading fees for all investment orders initiated on the Ren Virtual Machine (Ren VM). Dark nodes are set up using Amazon Web Service, Google Cloud, and Digital Ocean. DeFi projects adopt the RenVM to earn benefits from the speedy transfers, cross-chain OTC trading, and cross-chain liquidity.
A lot of DeFi investors with this Ren VM have moved their Cryptos into (Dapp) Defi applications to enable them to receive income on their cryptos that were formally idle. REN token is majorly used as a ‘bond’ for running a Darknode.
Any Wallet supported by Ethereum can be used to store REN since it is ‘an ERC-20’ token. This means that users have varieties of both hardware and software wallets to store their REN tokens. The choice of a wallet depends on the volume of REN users have and what they intend to do with them.
Crypto software wallets that support REN are Exodus wallet (desktop and mobile), Atomic Wallet (mobile), My Ether Wallet (MEW-desktop), and the Trust Wallet (mobile). They are simpler, mostly free, and need to be downloaded to a computer or a smartphone.
It could be custodial with the ‘private’ keys backed up and managed by the service providers on your behalf. And non-custodial that stores the private keys using a secure element.
The Hardware REN-supported crypto wallets include KeepKey, Trezor, and Ledger. The hardware wallets are more secure storage options; they store offline with a storage backup.
They are more expensive, difficult to understand, and also known as cold wallets. This type of wallet is more preferred for highly experienced users with higher amounts of REN tokens for storage.
Lastly, there are other types of wallets one can use to store REN tokens. They are the online wallets or exchanges, also called hot wallets.
These are not good in terms of security, and users need to trust a platform to help them manage their tokens. They are good for members with a very small amount of token to store but trade frequently.
Note: Ensure you select a wallet that has strong security and a high reputation while choosing a wallet to store your REN.
REN is one of the ERC-20 standard tokens. It operates with a maximum supply cap of one billion REN and a total supply of 996,163,051 REN in circulation (March 2021). They sold 60.2% of their total supply to investors during their 2018 private and public REN token sale.
Fifty-six percent was given out during the private sale, and the remaining 8.6% sold out in the public sale. From the remaining supply, 200 million REN (19.9%) was kept as reserve, 99 million (9.9%) given to founders, advisors, and team members, and 50 million ( 10%) for partners and community development.fi
The REN formally used as ‘BOND’ for running a Darknode has been taken off the crypto market. This restricted the broader supply of the REN token. There are presently 1,769 registered Darknodes implying that around 17.69% of the maximum supply or 176.9 million REN bonds with these nodes.
REN token has a 2 year lock-up period for its founders and team members and 6 months lock-up for allocations given to advisors.
The protocol is on its road to growth as many decentralized finance protocols. With the launch of RenVM, it will be positioned to rise in value following the increasing demand for the cross-chain liquidity that users require.
Moreover, Ren is secured as it uses advanced technical algorithms on its network. Lastly, this is part of why the protocol is unique and has a brighter future.
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