Thread by @tokenterminal

Overview of @renprotocol:

1/ Ren is a protocol that enables private transfer of value between blockchains. Starting with BTC, BCH & ZEC, the goal is to bring cross-chain assets to Ethereum. Essentially → a decentralized version of WBTC.

The mainnet is just weeks away.

2/ 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.

3/ 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.

4/ 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 & mints it as an ERC20 on Ethereum (1:1 ratio).

5/ 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.

6/ 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 rep. of BTC on Ethereum).

7/ 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).

8/ Token model 1/2:

Nodes (“darknodes”) need to bond REN (100,000 REN, ~$6000 at current prices) for the right to secure the network.

Nodes get small % of the liquidity that moves through the protocol as fees (currently 0.1%, adj. by vote). There's a fixed supply of 1B REN.

9/ Token model 2/2:

Active nodes get rewarded every 4 weeks. Nodes that are inactive for more than 24h can be blacklisted by other nodes (=deregistered).

The node that notices malicious behaviour & slashes gets a portion of the bond - the rest is burned.

10/ Security assumption:

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.

11/ Governance:

The Ren protocol is initially governed by the core team in order to maintain a level of central control upon launch (= quickly react to/ fix bugs etc). The governance will eventually be moved to the REN tokenholders.

12/ Competitors:

tBTC (@keep_project) uses collateral to ensure funds are safe. WBTC (@WrappedBTC) utilizes a multi-sig among centralized custodians. @Atomic_Loans issues stablecoins (DAI, USDC) collateralized by BTC, instead of an ERC20 representation.

13/ Roadmap:

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👇

chaosdex.renproject.io/stats.

14/ New assets In pipeline:👇

15/ Ecosystem:

RenVM is being integrated/ ren-assets will be used by projects such as @AaveAave, @authereum, @CurveFinance etc.

Projects such as @KyberNetwork, @polychaincap, @TotleCrypto are helping guarantee RenVM’s safety by running nodes in the first phases of mainnet.💪

16/ Learn more:

i) podcast w/ @bzlwang and @AndyPickeringNZ

open.spotify.com/episode/53gLhj…

ii) technical overview of RenVM:

17/ Ren has a monthly community FAQ which compiles all questions & answers → we like this!👌

Check it out here: docs.renproject.io/darknodes/comm….

Our question to @renprotocol: Are there plans to use RenVM as a bridge/ peg-zone to @polkadotnetwork / @cosmos?