RenVM mainnet launch brings Bitcoin to the Ethereum blockchain - OhNo "WTF" Crypto

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RenVM mainnet launch brings Bitcoin to the Ethereum blockchain

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Founded in 2017 as the Republic protocol, Ren has evolved into an open protocol that enables the permissionless, private transfer of value between blockchains. Ren raised over US$33 million in a 2018 ICO, from venture capital funds and investors including Polychain Capital.

Ren's core product, RenVM, is designed to enable interoperability across the decentralized finance ecosystem. The product is a decentralized custody solution that creates a private and interoperable liquidity layer for the decentralized economy, enabling the seamless movement of assets between blockchains.

Privacy is a core focus for the Ren team. When using RenVM all decentralized applications can run in secret, preserving the privacy of users and data. To achieve this, Ren utilizes a zero-knowledge transaction layer that makes it possible to store and transfer tokens from any blockchain without exposing wallet balances or transaction amounts.

RenVM is one of the first DeFi products to bring cross-chain assets to the Ethereum ecosystem. The first supported cross-chain assets are Bitcoin (BTC), Bitcoin Cash (BCH), and Zcash (ZEC). By removing the liquidity silos that have limited DeFi use cases, RenVM hopes to serve as a permissionless tool that can be utilized by the wider DeFi ecosystem.

The mechanics of RenVM were explained by Ren CTO and co-founder, Loong Wang. “Any asset minted on Ethereum by RenVM is a 1:1 backed ERC-20. This means that if you have 1 renBTC (an ERC-20), you can always redeem it for 1 BTC, Wang explains. “It’s a direct supply peg. renBTC isn’t a synthetic, it doesn’t rely on a liquidation mechanism, and it’s not the price of Bitcoin on Ethereum. It is a one to one representation of Bitcoin on Ethereum that can be redeemed for BTC at any time, in any amount.”

The Ren smart contract can be seen on Etherscan, which shows there are 1.4121 renBTC live on the Ethereum mainnet.

RenVM enables blockchains to send tokens to each other, or call smart contracts on each other even if they weren’t built with this ability in mind. RenVM is one of the first DeFi products designed to connect any asset on any chain for use in any application.

"Successfully launching RenVM’s mainnet is a critical step in our long-term mission of creating a decentralized platform for DeFi that is self-sustaining and advances the industry as a whole,” said Taiyang Zhang, CEO, and co-founder of Ren. “Generic interoperability has been a thorn in DeFi’s side, and we’re thrilled that RenVM is now solving this problem by enabling cross-chain liquidity to crypto investors everywhere.”

The interoperability problem refers to the fact that native tokens such as BTC have been confined to use within their own blockchains. “There are a lot of different types of interoperability,” explains Wang. “One that gets talked about a lot is atomic swaps. These are only useful if you want to swap assets, which is great, but at the end of the day, that's all you can do. If you want to lend your asset or use it as collateral for a synthetic, you can't use atomic swaps, so they are quite limiting. Our approach is, we want other projects to build their blockchain however they want to, and we'll bring interoperability to them. We define generic interoperability as the ability for the user to decide what they want to do, and as long as it is something that can be expressed as a program, they can do that using RenVM, even across multiple chains. It is a very flexible and powerful idea that opens up a whole lot of new use cases."

RenVM can be understood as a decentralized custodian. Users deposit digital assets and RenVM then mints a one for one representation on the Ethereum blockchain as an ERC20. RenVM uses secure multi-party computation (sMPC) so that nodes can store blockchain private keys in a secure, private way. The result is a virtual machine that allows users to move assets to and from different blockchains, without permission or the need for a central third party. This is a crucial step that brings the DeFi ecosystem closer to its participant’s vision of creating an alternative financial system.

“In a next-generation financial system where cryptocurrencies are mainstream, blockchains must enable cross-chain value transfer across their respective protocols, and Ren is setting out to provide this catch-all utility,” explained Wang. “Our goal is for RenVM to function as a bridge between not only Bitcoin and Ethereum, but any imaginable pair of blockchain-based tokens, including stablecoins like Libra and China’s digital yuan.”

The Ren team has been finalizing the mainnet release of RenVM for several months. “We had plenty of lead time, and made sure we prioritized testing above an early release, so it has not been too stressful,” he said. “We had one sneaky bug that took us two months to finally trace and fix, so that was definitely a challenge. It can be quite stressful having bugs that you are struggling to develop a hypothesis for. In the end, fixing it was very satisfying. The work continues as we implement, execute, and optimize.”

RenVM hopes to be able to scale quickly and will aim to attract users with the support of the Ren Alliance, a consortium of DeFi projects and companies that are helping to secure, develop, and utilize RenVM. The Ren Alliance has asked its members to focus on utility, security, and development.

Members of the alliance include Polychain Capital, AirSwap, Kyber and DexLabs, and various other dapps, decentralized exchanges, institutional investors, and DeFi protocols. This group represents tens of thousands of network participants who can now use RenVM to access cross-chain liquidity and earn a yield on their assets.

Ren raised US$34 million in an initial coin offering in 2018. A major investment came from Polychain Capital, a leading crypto VC firm that was an early member of the Ren Alliance and is securing the RenVM network.

“What drew us to Ren is the founders’ vision for bringing decentralized finance into the mainstream of crypto, and eventually the global financial system,” said Sherwin Dowlat, Investments at Polychain Capital. “RenVM is an elegant solution for solving generic interoperability, and we’re thrilled to help guarantee the safety of RenVM by serving as a darknode in its semi-decentralized core.”

Wang confirms that Polychain was an early investor. “They backed us after completing due diligence,” he noted. “I think they saw the opportunity in this space, for new technology that would empower blockchain and their applications, and a team that is able to execute. They will be securing the network by participating in running Darknodes in our Greycore while we transition to being more and more decentralized. They have a vested interest in many projects in this space and a big reputation, so they’re well incentivized to help DeFi evolve.”

The wider DeFi space is still at a nascent stage but Wang is optimistic about its long term potential. "When a new technology emerges, it is very janky to use at first, which is where blockchain is now. But in five years time, users won't need to know they are using a blockchain, they will just do it. Users shouldn't have to even think about interoperability or understand what it means, they need to be able to simply do what they want to do. In the same way that today's internet users can seamlessly use applications like Zoom and the cloud to communicate and access documents, in the next ten years I think we see money infrastructure take that same leap. Now that we can digitize everything and make everything interoperate smoothly, that is the vision we are working towards.”

RenVM is working to bring other assets to the Ethereum blockchain including stablecoins such as Libra and Celo. While RenVM currently supports bringing digital assets to the Ethereum ecosystem, the same approach could be applied to other smart contract protocols like Polkadot and Tezos.



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, Khareem Sudlow