Cross-chain TVL is exploding with L1 ETH now having <75% of the total tracked market share.

We don't know exactly what protocols and where all this TVL will go to... but we know that this movement has to be fluidly enabled by something.

Enter $REN.…
REN has flown under the radar recently as an OG interoperability solution due to a number of competing bridges that have emerged and a less in-demand set of tokens, but that can change in the coming weeks with the launch of host-to-host allowing the transfer of ERC-20 tokens
This means that for the first time, stables and native-L1 tokens like ETH will be able to freely and instantly flow back and forth from nearly all alt-L1's, L2's, AND to non-EVM chains like Solana through 3rd party incentivized pegged renToken pools like Curve and Saber
Apart from bridging assets, through RenVM we can actually respond real-time to events on other chains with any asset from any supported network (L2 to SOL for example) in one transaction, enabling a whole new set of market making and arbitrage opportunities
Existentially, I'm convicted in the idea that the next level of DeFi innovation will come from an aggregation of user experiences across blockchains that bring new users in through the best possible UI/UX while appearing chain-agnostic which RenVM can tie together h/t @xSabobi
Intuitively, DeFi must become as seamless to interact with as we currently interact with everything on the internet through one web browser with various plug-in functionality. We are far from this but RenVM could be the backend to power the next generation of aggregated DApps
Usage metrics: RenVM was acquired by Alameda in February to bring interoperability to Solana and increase volume Serum. It's done its job: RenVM SOL volume has tripled over the past week and TVL locked into RenVM this month on SOL has dwarfed the new TVL locked on ETH by over 2x
Flywheel effects: You need to stake 100k $REN to run a darknode, and darknodes get 15 bps of all transaction volume in the token being transferred (REN is not inflationary), thereby enhancing network security, since you need enough REN to to control 1/3 of the Darknodes
Valuation: A revenue model targeting Darknode APY at ~10% and a cap at 10,000 darknodes supports a base token value at $2.80 end of 2022 and $6.50 in 2023 based on some assumptions for total DeFi TVL and RenVM volume assuming demand comes only from operators not speculators
Competition: post host-to-host, there are two main buckets here:

1) Bridges (CELR, ANY, SYN) h/t to @dberenzon for the rundown on architecture here
2) General interoperability (ATOM, DOT, RUNE)
Compared to other bridges REN is only dependent on the tx finality bottleneck of the slowest blockchain, allowing for as close to real HFT exists between blockchains, and will slash darknode operators and refunds lost funds if exploited. I like all 🌉 though
The reason REN could compete with "real" interoperability solutions is because unlike other bridges, it has the ability to pass logic through normal smart contracts beyond just mints and burns using the VM, and I'm excited to see these dapps develop further post-h2h
The idea: in one tx, if FTM on Fantom is trading at a premium to FTM on Ethereum, I could sell FTM to USDT on a Fantom DEX, move the USDT to Ethereum using renUSDT, buy back FTM for cheaper than I sold it, and move that FTM back to Fantom, netting the profit directly on FTM.
With skyrocketing demand for interoperability, the battle-tested REN tech stack should be valued where 1) cross-chain security has been compromised and 2) there is an immediate need for TVL to move cross-chain while new DeFi on other interop platforms are still a way out
The Ren team has been in DeFi before DeFi was DeFi. High confidence in the team being able to roll out a product featuring the most secure and scalable interop solution. Has had no exploits since their most recent mainnet launched last May
Thanks to BT team for feedback @AriDavidPaul @AviFelman @brichardson__ @xxstevelee and @renprotocol team for the vision in enabling a cross-chain future
Disclosure -- BlockTower is long $REN and other projects mentioned in passing. Full disclaimers here:…

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