Learn how to use RenVM for cross-chain DeFi, mint Bitcoin as an Ethereum ERC-20 token and explore moving other cryptoassets across blockchains.
RenVM is an interoperability protocol for decentralized finance (DeFi), allowing anyone, anywhere to move digital assets between blockchains.
What problem does RenVM solve?
RenVM brings interoperability to DeFi, which allows assets like BTC, ZEC, and others to be used within the Ethereum ecosystem (DeFi) and other smart contracting platforms.
The easiest way to imagine RenVM is to first think of it as a custodian that holds your digital assets as they move between blockchains. You provide BTC to RenVM; it holds that BTC, and then mints that BTC as an ERC-20 (a.k.a. renBTC) on Ethereum with 1:1 ratio to ensure the same amount of BTC always backs your renBTC. This approach applies to almost any digital asset and smart contracting platform. For example, RenVM can hold native Dogecoin and mint it on the Polkadot blockchain.
RenVM achieves interoperability because it serves as a “universal translator” or an adapter of sorts. It takes the blockchain’s native format and converts it to the format needed by its destination chain (e.g., RenVM takes BTC in its native form and converts it to an ERC-20, the Ethereum token standard). More information on RenVM can be found here.
The REN token is Ren Protocol’s native token and is used as a bond to run a node, which powers RenVM.
While anyone can run a node, to prevent the forging of identities, 100,000 REN tokens are required to register and run the node, thus ensuring good bond behavior. This also prevents malicious adversaries from running an unbounded number of nodes and overwhelming the network with misbehaving nodes.
Every time RenVM moves an asset from one blockchain to another, it takes a small fee. Nodes (and those who run them) earn these rewards (in BTC, ETH, ZEC, etc.) for helping power RenVM. More information on running a node can be found here.
renBTC is an Ethereum native ERC-20 peg to Bitcoin created by Ren Protocol. renBTC tokens are generated through the RenVM, and renBTC represents a 1:1 peg to Bitcoin (BTC), meaning users can redeem their renBTC for BTC anytime through RenBridge.
renZEC is an Ethereum native ERC-20 peg to ZCash created by Ren Protocol. renZEC tokens are generated through the RenVM, and renZEC represents a 1:1 peg to ZCash (ZEC), meaning users can redeem their renZEC for ZEC anytime through RenBridge.
Over the coming quarters, RenVM will be expanding the number of blockchains it supports and furthering its level of decentralization to ensure the network is robust as possible.
For more information, visit the website and check out the RenVM wiki for a technical deep dive. A summary of the network statistics across the various platforms using the Ren protocol is available at https://mainnet.renproject.io. If you're interested in learning more, join the Ren community on Telegram.