— Ren (@renprotocol) May 27, 2020
The highly anticipated launch brings a novel, trustless solution for users to mint Bitcoin, Bitcoin Cash, and ZCash as ERC20 tokens – allowing them to be used in the ever-growing DeFi landscape.
“RenVM is an sMPC based decentralized custodian that fluidly mints and burns digital assets 1:1 on Ethereum as ERC20s.”
Thanks to the Ren Alliance, we’re already aware of 51 projects supporting Ren including several leading DeFi projects integrating renTokens support including but not limited to Aave, Kyber Network, iEarn and Zapper.
Beyond the first three supported assets, we expect Ren to soon support dozens of other protocols like Tezos and Decred, giving DeFi users a way to trade, lend and borrow native-protocol tokens directly on Ethereum.
For those who missed it, we took some time to chat with the Ren team about RenVM in an exclusive interview which can be found here. Michael Burgess – Head of Community at Ren Protocol – added some color to the mainnet release stating:
“While it may seem like a small step today, RenVM is going to help propel the DeFi ecosystem forward and, eventually, uproot traditional finance. We are quite excited to achieve this milestone, but we’ve got a busy few years ahead of us.”
To this end, it’s great to see the team at Ren continuing to deliver while remaining realistic about the future at hand. In an industry where many projects commonly overpromise and underdeliver, we can confidently say that Ren is not one of them.
What’s To Know?
For those who have some spare Bitcoin laying around and want to port it to Ethereum, head on over to the Ren Bridge. This is where users can connect a web3 wallet like MetaMask to receive newly minted renTokens and interface with a sleek minting portal.
When requesting renBTC, RenVM spits out a one-time address for users to deposit the amount of tokens they wish to port to Ethereum.
Upon submitting the deposit, renVM holds the Bitcoin in escrow and returns an equivalent amount of renBTC less a 0.1% protocol fee and a fixed fee per asset. Users can burn renBTC to claim the underlying asset to an address of their choosing at any time.
Underneath the hood, RenVM is powered by Darknodes – or validators responsible for the minting, custody, and fee collection of all assets which pass through the protocol. Node operators stake 100k REN (~$8,900 at the time of writing) in exchange for a pro-rata claim on the 0.1% trading fees.
What’s interesting about REN’s model is that fees are earned in the token which is being traded, in this case, Bitcoin. To this end, node operators stand to earn BTC for validating the new renBTC that is minted on the network.
Bitcoin in DeFi
At the risk of sounding like a broken record, Bitcoin is making it’s way to DeFi.
With the recent spike in WBTC being used to mint new Dai in Maker, we expect renBTC to play a strong role in the wider DeFi ecosystem when it comes to porting the top cryptocurrency into the ever-expanding landscape.
Paired with projects like tBTC, pTokens and Atomic Loans all offering novel solutions to bring Bitcoin to Ethereum, we’ve even seen projects like PieDAO spring up to govern how these different Bitcoin wrappers are being handled.
If one thing is for sure, the ability for anyone to seamlessly port Bitcoin to Ethereum at their convenience with no middlemen and no intermediaries is an incredibly powerful notion.
Cooper is the Editor of DeFi Rate and an active contributor to leading DeFi media outlets like The Defiant, DeFi Pulse, and Bankless. He works with early-stage teams through Fire Eyes DAO to incubate governance models and grassroots community development. He is an ambassador to Set Protocol and an author of a weekly publication called Token Tuesdays. To stay up with Cooper, follow him on Twitter.