In this newsletter, we are profiling Ren [REN]. In previous newsletters, we have profiled Bitcoin, Cardano, Stablecoins, Uniswap and many others. Access all our newsletters in our archives at madcapx.substack.com.
The Short of It
Is Ren the missing piece of the puzzle that allows the major blockchains to connect together? Will we all eventually use it to move our Bitcoin or some other token into the wide world of DeFi without having to place trust in any centralized custodians?
The Ren protocol launched in 2018, with its REN ERC20 token and its virtual machine mainnet going live in 2020. Initially called “Republic Protocol” and founded by Taiyang Zhang, it was rebranded in 2019 as just “Ren.” The goal of this protocol is to provide liquidity and interoperability between different blockchain platforms. The token is used for bonds for people running nodes that power the network, called “Darknodes.”
There is a maximum supply cap of 1 billion REN, of which 60% was sold in public sales during 2018. 20% was put into a reserve fund, as well as 10% going to pay the development team and founders. The remaining amount was allocated for partnerships, promotions and other requirements.
The virtual machine, which uses a Byzantine Fault Tolerance (BFT) algorithm for consensus, also has sharding handled via a modified version of Tendermint (created by the Cosmos team), can handle around ten transactions per second and currently runs on approximately 2,000 decentralized dark pool nodes. Whereas most DeFi ecosystems will have publicly readable order books, Ren is unique in that its order book is completely hidden.
If you are familiar with wrapped tokens, such as WBTC, you may know that they are usually centralized. In the case of WBTC, a company called BitGo is responsible for managing custodial functions when Bitcoin is wrapped. In comparison, when using REN and wanting to transfer Bitcoin, it becomes renBTC and is completely decentralized via the dark nodes. Ren currently supports Bitcoin, Bitcoin Cash, Dogecoin, Zcash, Digibyte, Filecoin, and Terra across the Ethereum, Binance Smart Chain, Solana, Avalanche, Polygon, and Fantom blockchains.
To run a dark node, you will need to bond (stake) 100,000 REN. The benefits include getting rewards as a percentage of network fees as well as being able to participate in governance. Traders pay fees in REN when submitting an order and any node that participates in order matching receives a percentage of the order fee. The rewards are handed out every epoch (28 days). If you are interested in more information, check out their node documentation.
Ren originally had a core global community with a concentration in China and Europe. It has now grown internationally with the release of RenVM and every growing use case being explored and developed. Have a look at their ecosystem blog.
Other ecosystems which provide similar functionality and could be seen as competition include Thorchain (RUNE), Keep Network (KEEP), Wanchain (WAN) and all the “wrapped” tokens.
Ren is a good project to keep track of if you believe in the importance of interoperability between the biggest blockchains.
REN/BTC on the weekly chart shows the all-time low of 291 Satoshi in August 2018 and almost going back to that in May of 2019. In 2020, REN had a long bull run that brought it to its all-time high of 4975 in August 2020, for a gain of 1594% from the lows. Since then, REN has lost most of those gains from the 2020 bull run and is now attempting to break upwards out of a huge descending triangle. Is REN setting up for a pump of some kind on the weekly chart?
REN/BTC on the daily shows the downward move that continues to see lower lows, with the last hitting 863 Satoshi. Over the next few days, we might see REN test two different resistance lines, the previous high and the top of the trend line. If REN can breakthrough on this daily chart, it could be interesting since the weekly is also looking to break out over the next 6 days.
Of course, there is plenty of room to break further down from here. The all-time low is still 75% lower. If REN continues inside this downward trend, we could see it hitting all-time lows as early as September.
The Other Trend Lines
BTC/USD on the daily chart is seeing a pullback over the last two candles. Is this a few-day correction with the previous high and the 50-day moving average providing some support before it continues upward toward two more daily moving averages of 128 and 200? If it continues down we should see BTC turn bullish around the $35,000 to $36,000 range if the support holds.
This portfolio section gives you an idea of what sort of return you can get when investing in crypto assets.
BTC/USD FUND is up 262% since October 1st, 2020. Since this is a long-term holding, it is best kept in cold wallet storage or a safe custody solution. We continue to see a long-term hold position as our best stable alternative. This past week bitcoin has been ranging between $36,380 and $42,599 USD in value.
FUND 3 started on November 16, 2020, with $1000 USD in value and was invested into BTC, LTC, ETH, and ADA. The total amount of BTC value from the four coins has had a gain of 98% since the start. The USD fund value is up 365% since the start. We will hold these positions to see how well it does against our BTC-only portfolio. LTC is down -16% against BTC. ETH is up 143% against BTC since the start. ADA has a gain of 441% against BTC and 1157% against USD.
BLWX Fund started on February 22, 2021. They all are assets we have profiled in the last few months, and we are interested in how they will perform in 2021 against BTC. BAT has a gain of 66% against BTC since the start; LINK is up 4%, WAVES is up 99%, XMR is up 38%. Overall, against BTC, the fund is up 52% and 8% against USD.
Overall, Bitcoin should be your first choice as an investment in crypto, though many digital assets can give you amazing gains if you manage your risk. As a long-term investor, we see it as our largest portfolio investment. If you are a day trader, there are many great assets to put on your watch list. Look through our previous newsletters to find some.
Madbyte does have its own token called MADX on the Ethereum network and Madbyte on the Waves network. The two tokens are interchangeable on Madcapx.com.
Disclaimer: Nothing in this newsletter is intended to serve as financial advice. Therefore, do your own research and due diligence before applying any of the techniques highlighted in this post. Any risks or trades based on this newsletter are committed at your own risk.