What is Ren (REN)?
Ren is an ERC-20 token designed to reduce barriers to entry to Decentralized Finance (DeFi).
‘Darkpools’ are OTC markets where investors can purchase relatively large amounts of assets anonymously. While they exist in both traditional and cryptocurrency markets, they are contingent upon trust in the third party keeping the transactions anonymous and secure.
Ren’s platform, the Ren Virtual Machine (RenVM) is the crypto equivalent, with the caveat of being completely decentralised and trustless. This allows for a transaction to occur without knowing the amount or destination of the transactions taking place.
Ren uses ERC-20 token equivalents of non Ethereum-chain assets for cross-chain orders. For example, transacting BTC against ETH does not actually move your BTC onto the ETH blockchain, but mints an ERC-20 equivalent of BTC instead. Transacting the BTC back to its native chain burns the ERC-20 equivalent token.
While simple in theory, this eliminates the need to “wrap” non-ETH cryptocurrencies to use as an equivalent on the Ethereum blockchain, saving both time and trouble.
REN is used for two functions. Firstly, it is paid for any trading fees made on the Ren Virtual Machine (RenVM) - the central platform used to transact cross-chain assets. Secondly, it pays bonds to the “Registrar”, which is a smart contract that manages the Darknodes that provide the compute power necessary to identify and process any orders.
By enabling cross-chain interactions, REN allows users to collateralize cross-chain assets into smart contracts for lending and borrowing purposes that they wouldn’t otherwise be able to do.