Ren Protocol Review

What is Ren Protocol?

Ren Protocol was created with the purpose of the permissionless and private transfer of value between any blockchains. Its initial capabilities were focused on bringing Bitcoin, Bitcoin Cash, and Zcash to the Ethereum blockchain, but since then Ren has integrated with other networks and notably expanded the horizons of its interoperability.

As of the time of this writing, Ren supports minting Bitcoin, Bitcoin Cash, Zcash, Dogecoin, Digibyte, Filecoin, and Luna assets into tokens on seven blockchains and solutions, such as Ethereum, Binance Smart Chain, Fantom, Polygon, Avalanche, Solana, and Arbitrum.

Unlike Wrapped Bitcoin, users are not required to pass KYC procedures to transfer their BTC on Ethereum, their transactions are completely private. Ren also doesn’t require to provide excess collateral, all synthetic assets are minted at a 1:1 ratio. However, this service requires a certain fee that is paid to participating Darknodes in the same crypto that is being locked on RenVM, e.g. user pays in Bitcoin while minting renBTC, and in Dogecoin while minting renDOGE.

Ren was founded in Singapore in 2017 under the name Republic Protocol and rebranded in 2019. Its mainnet went live in May 2020.

How does Ren Protocol work?

Ren’s main product so far is RenVM, a virtual machine that acts as a decentralized custodian bridge allowing liquidity between different blockchains. It does so in a permissionless and secure way minting ERC-20 tokens (or any other supported token standard, depending on the chain) in exchange for native assets that are being locked in the protocol.

RenVM operates through a network of thousands of so-called Darknodes. Each of the nodes is required to run RenVM software via a Virtual Private Server and to lock 100,000 of REN tokens in the protocol. This bond serves as a guarantee for the node’s good behavior as any malicious actions on the network are financially punished. 

RenVM is a Byzantine fault-tolerant (BFT) network that can operate even if some Darknodes become unavailable or behave maliciously. Aside from BFT, Ren Protocol’s security is based on a combination of different technologies such as Shamir's Secret Sharing cryptographic tool that breaks data into multiple parts held by different participants. This tech is used to conceal private keys.

Another important feature of Ren is the Secure Multiparty Computation (sMPC) algorithm that allows Darknodes to run scripts trustlessly without revealing the inputs or outputs to anyone, not even to other nodes. Additionally, Ren uses a modified version of Tendermint called Hyperdrive as a consensus mechanism to safely process transactions with a high speed of 20 confirmations in five minutes. 

The most recent upgrade called Host 2 Host enabled the creation of tokenized versions of assets from any supported chain to be transferred to another network. Ren also now supports the cross-chain transfers of LP tokens.

How to use Ren Protocol?

To interact with the Ren Protocol app, users need to visit the Ren Bridge and connect with a wallet to it. Currently, the recommended by Ren Protocol wallet is MetaMask. Once connected, users need to select the number of tokens they want to convert and click on the “Next” button. Then, the Ren Protocol app shows the users the costs for the transactions including Ren Protocol fees, once approved the user needs to click the “Confirm” button. A one-time deposit address shows up where the user needs to transfer the exact amount of the token they want to convert. After a few network confirmations, varying for the different assets and networks, users can withdraw their newly minted tokens by accepting the transaction through their wallets.

The REN token

REN is an Ethereum ERC-20 token with a maximum supply of 1 billion. Its sole utility is to secure the protocol by serving as 100,000 bonds locked by nodes willing to participate in the network.

The list of assets available for bridging to other blockchains via Ren Protocol includes Bitcoin (BTC), Bitcoin Cash (BHC), Zcash (ZEC), Dogecoin (DOGE), Digibyte (DGB), Filecoin (FIL), and Luna (LUNA).

Is Ren Protocol safe?

Taiyang Zhang is the co-founder of Ren Protocol who had been its CEO from the beginning until he stepped away in October 2021 to take an advisor’s role. According to his social profile, Zhang is currently a Venture Partner at Alameda Research Ventures. He is also affiliated with other prominent projects in the blockchain space, serving as the founding member of KeeperDAO and advisor at Hummingbot.

The second co-founder, Loong Wang, is currently the CTO of the Ren Protocol team. Ren Protocol audits can be found in the protocol dashboard on this webpage.

Partners 

Initially created on the Ethereum blockchain, Ren Protocol has since integrated Binance Smart Chain, Fantom, Polygon, Avalanche, Solana, and Arbitrum.

Aside from seven blockchains already integrated with Ren, RenVM’s synthetic assets exist on Polkadot and Kusama via the integration with Acala/Karura parachains. 

In February 2021, Ren announced it is joining Alameda Research, a cryptocurrency trading company standing behind FTX Exchange and many other prominent blockchain projects. 

So far, Ren Protocol has collaborated with a wide range of decentralized applications across different networks. In October 2021, the project announced it is developing a cross-chain AMM called Catalog that is based on RenVM. 

What's next?

According to the most recent Ren Protocol roadmap, in early 2022 it is expected to launch an update to Darknodes which will incorporate a new burn-and-mint transaction type. The mechanics will allow renBTC and other supported assets to be bridged to another blockchain without going back to their original chain. 

The project has given the listing process for new assets on the platform to the hands of the community’s governance, through a thread on the Ren Protocol forum. The Ren Protocol team is researching possible blockchain support from networks outside the so-called ECDSA realm - Cardano, Ripple, etc. Throughout the year, work will be done on finalizing the application of decentralized bridging by expanding the RenVM and allowing third parties to build and deploy custom dApps using its stack. 

Links

https://renproject.github.io/ren-client-docs/general/

https://forum.renproject.io/