The REN token is a product of the Republic Protocol project launched in 2017. Republic Protocol aims to steer blockchain technology back toward its decentralized, anonymous, unregulated origins by enabling the use of dark pools to facilitate cryptocurrency trading across the various active chains.
It’s an idea that appeals to a lot of crypto purists but has others raising their eyebrows. Still, should it manage to buck the odds and succeed it has the chance to alter, at least in some small way, how investors view the business of the cryptocurrency exchange.
To facilitate the Republic Protocol and its operations, the company launched the REN token in late 2017. Besides being the token that lubricates the wheels of Republic Protocol transactions REN is also available for trading on the open market.
What is the Republic Protocol?
Republic Protocol founder and CEO Taiyang Zhang has made no secret of his desire to halt what he sees as the drift toward the regulation of cryptocurrencies. This violates the spirit of crypto in his estimation, and he’s not alone in thinking this.
The problem is that until now, few of the leading lights of the crypto-verse have posited anything like a practical way to do anything about it. And that’s where the Republic Protocol comes in. The Republic Protocol is completely decentralized and uses dark pool assets that restore discretion to the business of cryptocurrency trading.
The order book of this new decentralized exchange is itself entirely decentralized using multi-party cross-chain computation and atomic swaps to enable the exchange of assets once an order has been matched. If that has your head spinning, you’re not alone. Perhaps it would help to have a slightly better idea of just what is meant by “dark pool.”
What Exactly is a Dark Pool?
The concept of the dark pool is not new. Just new to the crypto-verse. Its primary function is to enable investors to execute large trades outside the confines of the standard exchange ecosystem. Why? Ostensibly to prevent what’s called “slippage.” Slippage is what happens when people not involved in a large trade see that trade appear on the order books.
When that occurs, the herd mentality sets in and everyone tries to either buy or sell at the same time in order to get in on the action. By keeping large orders from appearing on publicly accessible order books, slippage is prevented. But there’s another side to dark pools.
First, the fact that large orders are executed without any sort of transparency raises all kinds of red flags with investors and regulators alike. And second, when the transaction itself (not the principles involved) is ultimately is made public, as it must be, it can cause a flash crash.
The REN Token within the Republic Ecosystem
The REN token is the native coin of the Republic Protocol and is used within the protocol to incentivize the matching of orders. REN will also be used as the only token permitted to act as a bond to help stave off the possibility of Sybil attacks. (More on that in a minute.) There will be a total of 1 billion REN Tokens eventually released.
REN tokens will be used by traders to pay for transactions. Nodes will use REN tokens to cover the cost of the computations necessary to conduct order matching. Should an order expire before being matched, the fee paid to cover the matching costs will be refunded.
About That Bond
The nature of a distributed network like the Republic Protocol means that they’re theoretically vulnerable to what are called “Sybil” attacks. A Sybil attack is when one entity (person or group) gains control of a majority of the nodes being used to generate a match.
In theory, this could create a situation where that single entity possessed enough information to be able to reconstruct the order. The bond is intended to prevent this by requiring all traders and nodes to deposit a certain amount of REN in order to gain access to the Republic network.
This bond is held in the registrar smart contract and is therefore available for query by any interested party. It’s about as close to transparency the Republic ecosystem comes.
The Republic Protocol Team
The folks behind the Republic Protocol are experienced software developers or come from an investment background. Or both. None could be considered leading figures in either arena. Though they’re not exactly wet behind the ears either. They are:
- Taiyang Zhang: CEO – Taiyang was a software developer who also spent time as a manager at Quantitative Investment Fund. Besides being the CEO of the Republic Protocol, he is also an adviser at Perlin and the Loki Network. He was also an adviser to the now-defunct CoinAlpha, which was fined and shut down last year by the SEC for violating Section 5(a) of the Securities Act. Essentially, selling securities without a license.
- Loong Wany: CTO – Loong Wang takes on the role of Chief Technology Officer at Republic Protocol after a stint as a software developer at Neu Code Systems where his focus was on providing high power software solutions for financial institutions, banks, work groups and more. He also spent time conducting research at the Australian National University.
Republic Protocol Advisors
Republic has reached out to a number of seasoned advisors in their quest to fashion a decentralized crypto trading environment using dark pools. Those advisors include:
- Dorjee Sun: CEO Perlin – Perlin is an industry leader in the development of WebAssembly Smart Contracts.
- Anup Malani – Anup is a Professor at both the University of Chicago and the Pritzker School of Medicine. He’s also a research associate at the National Bureau of Economic Research and an editor of the prestigious Journal of Law and Economics.
- Loi Luu: CEO, KyberNetwork – KyberNetwork is a cryptocurrency exchange protocol that enables seamless interaction between vendors, platforms and tokens. Their native token (KNC) is used to facilitate transactions on the network.
- John Ng Pangilinan: Partner, Signum Capital – Signum is a Singapore-based consulting firm whose stated purpose is to advance the cause of the crypto-economy. They deal exclusively in ICO pre-sales.
What is the REN Token?
When Bitcoin was launched in 2009, it was the only player in a non-existent market. Today the number of cryptocurrencies is pushing toward 3,000, yet only 25 of them make up more than 90% of all crypto market cap. With Bitcoin making up nearly 70% of that total.
It’s no longer enough to simply launch a coin and wait for the speculators to take over and catapult you to untold riches. You need to create a context for the coin. You need to create relevance. Otherwise, it’s just another virtual currency floating in a virtual sea made up of 1s and 0s. So where does that leave REN?
How Does Republic Protocol Work (Does it Work?)
Essentially the entire Republic Protocol/Dark Pool marketplace seems like little more than a way to try and justify the existence of REN. Let’s face it, most crypto traders are not purists. They’re speculators.
So although the folks behind REN may posit their protocol as a return to form for the leaderless crypto-verse, it’s not an issue that most traders care much about. But right now it’s what the team at RP is counting on to generate relevance for REN.
Does that make it an outright scam? Not at all. Many coins these days are using similar strategies driven by a need to stay afloat until they can catch a speculative wave and cash in. But since the issue is not front and center in the minds of most traders and because it’s not the easiest concept to wrap one’s grey matter around the headwinds are likely to remain significant for the Republic team, at least for the short term.
REN Cryptocurrency Final Thoughts
Don’t get us wrong, we’re all for innovative ways to advance the cause of the cryptoverse. But the Republic Protocol seems like an idea that’s moving against the tide. At a time when the major cryptocurrency exchanges are angling toward some form of regulation in order to broaden their customer base, Republic is moving further into the shadows.
And at a time when governments are making clear their intention to ferret out secretive financial transactions, REN is saying they’re the way of the future. Pardon us if we’re skeptical. Taiyang Zhang’s own experience at CoinAlpha should tell him that more secrecy isn’t an idea that’s going to float in the halls of the SEC.
How to Store Your Ren Coin
But all that aside, let’s say you’re an intrepid crypto trader who’s just got his hands on some REN coin via your favorite crypto exchange. What should you do with it?
Being a standard ERC-20 coin REN can be stored in any suitable ERC-20 web or desktop wallet. Such as the popular Atomic desktop wallet. However, we strongly recommend you invest a few dollars and pick up a Trezor or Ledger USB third party wallet.
These palm-sized pieces of hardware will enable you to put your crypto keys out of the reach of ever more aggressive and sophisticated hackers. Setup of either of these stand-alone devices takes only a few minutes and could save your bacon.