Ren has become popular in recent times after hitting an all-time high in September 2020. In this article, we explore the Ren project.
Ren was founded by Loong Wang and Taiyang Zhang, classmates at the Australian National University. They built an OTC platform on the Ethereum blockchain called the Republic Protocol that has evolved into a powerful DeFi protocol.
Two rounds of initial coin offerings (ICO) followed in 2018, which raised $34 million to start the project.
What is Ren?
The initial project by the co-founders was an OTC platform. It grew when they identified that there was a problem with blockchain interoperability.
Ren is a Blockchain protocol that ensures interoperability and provides liquidity between multiple blockchains.
OTC trades have become risky in recent times due to increasing fraud. In some cases, the other party fails to honor their end of the bargain, making away with your money. Ren makes it possible for OTC trades across multiple blockchains while ensuring that both parties fulfill trade requirements.
Multi-blockchain OTC and liquidity have become very important due to the rise of decentralized finance (DeFi). Liquidity is needed to provide volume for swaps, and OTC is essential in moving large sums of money in a decentralized manner.
How does Ren work?
Ren Virtual Machine (RenVM) is at the heart of the Ren protocol. It is powered by a network called Darknodes that earn rewards for contributing to the network.
RenVM makes trustless movement of crypto from different blockchains possible. The Shamir Secret Sharing Scheme algorithm ensures transaction anonymity. Darknode operators do not get details on transactions. The destination and amount in the cross-blockchain swaps are private.
RenVM is built on the Ethereum Blockchain and supports ERC20 tokens, Bitcoin, Zcash, and Bitcoin Cash.
What role does REN token play?
The REN token plays two essential roles on the Ren protocol. REN is a utility token used to pay for fees of trades made on the RenVM. Also, it is utilized in the payment of bonds to the Registrar.
The Registrar is a smart contract that manages Darknodes in the Ren ecosystem. Users have to pay 100,000 REN to the Registrar to run a Darknode.
The Ren protocol makes it easier for DeFi applications to be built and used. As the ecosystem develops, Ren is expected to grow with it.