Penguin FA — Republic Protocol ($REN)

Crypto Penguin
Jan 16 · 16 min read

This article was first released to the CryptoBirb Exclusive Nest Club.
For more information, visit

Website | Lite Paper (Q1 2019)| White Paper (Dec 2017)| Twitter | Telegram | Reddit | Github | Medium

Circulating/Max Supply: 631,984,400 /1,000,000,000
Mineable ❌
✅ (Darknodes)



Republic Protocol started out with a mission to build a protocol for a decentralized dark pool that allows traders to buy and sell large amounts of cryptocurrencies without announcing their intentions through an open order book. It currently supports Bitcoin, Ethereum, and ERC20 tokens, with plans for expansion to other cryptocurrencies.

Republic Protocol’s description from their original white paper (left) and from their new Q1 2019 Litepaper (right)

In a November 2018 presentation and their January 2019 update, the team revealed that in their quest to create the most private dark pool possible, they ended up creating a new virtual machine called RenVM. Their new algorithm allows a decentralized network of computers to work with data while maintaining end-to-end privacy.

Their ultimate aim is now to become a platform for privacy-preserving decentralized applications. In the short term though, Republic Protocol will still be focused on creating a private decentralized dark pool.

Dark Pools

Facilitating OTC cryptocurrency trading has the potential to be highly lucrative. In April 2018, Reuters reported Genesis Trading as handling $75–80 million daily trading volume on average. Circle Trade handled $24 billion in volume in 2018. A dark pool is a form of OTC trading that offers greater privacy.

Normally, a trader announces their intention to buy or sell by placing an order that is displayed in an order book. Other traders can then see that order and raise or lower their prices to fulfill it.

Rich whales can have trouble filling large orders on regular exchanges

If you are a whale trying to get in and out of large positions though, placing large transparent orders can be problematic. It provides information to other traders who could try to copy or undermine your efforts. Market prices can also be affected by traders who react to the large order. This is why some exchanges offer the option to place hidden orders.

But hiding the order alone is not enough for large orders to be filled without affecting market prices. Traders can still determine the existence of a hidden buy or sell wall if large numbers of trades go through but fail to make a difference in the market price. A sudden increase in trading volume can change the price as traders react, resulting in slippage.

This is why whales and traders with large positions often turn to dark pools, where large hidden orders can be discreetly matched and filled by other hidden orders. This usually requires a third party that has to be trusted to match these hidden orders while keeping information about these orders hidden from others.

But how do you know if you can trust these third parties?


Many existing dark pools have been fined by the SEC for lying about how they operated and failing to keep order information confidential. As long as the party operating the dark pool has access to order information, there will always be the possibility that they will try to profit from it.

A Decentralized Dark Pool

Republic Protocol is planning to solve this problem by creating a protocol that allows orders to be matched without any knowledge about the details of the orders. This makes it impossible for any third party to reveal information about orders submitted to the dark pool.

Through the use of the Shamir’s Secret Sharing algorithm, orders are split into fragments and distributed to different nodes that then work together to match orders. Privacy is maintained because no single node has the full order information. Ethereum smart contracts are also employed to help maintain privacy and verify computations. Once orders are matched, traders can then perform atomic swaps to exchange assets directly with each other.

RenVM — A Privacy Preserving Virtual Machine

CTO Loong Wang explains the benefits that RenVM will bring to their dark pool (Source)

In order to make their dark pool more secure, stable, and private, Republic Protocol created RenVM, a virtual machine where privacy can be maintained for all inputs, outputs, and even for generated data.

CTO Loong Wang says that RenVM can be used to build privacy-preserving apps in areas like voting, financial, or sensitive data analysis (Source)

RenVM makes it possible for a dApp running on Republic Protocol to work with sensitive data (such as financial or health information) and calculate a result (such as filling an order or conducting medical research) without ever exposing that sensitive data to anyone.

There will be several different components to Republic Protocol’s new platform built on RenVM. So far the team has revealed three components, which are:

  • zkTransactions Layer: RenVM can create private keys on different blockchains that are unknown to everybody. These blockchain-specific private keys are each controlled by dapps called zkTransactors. Users can deposit funds through these zkTransactors. From that point on, trades and transfers can be made while keeping balances and transactions secret. When the users wish to reclaim their funds, they can simply withdraw the cryptocurrencies back to their own blockchain-specific wallets.
    Note: The Lite Paper states that this “makes private transactions possible for any blockchain”, but it does NOT specify any way of hiding deposits, withdrawals, and public keys for public blockchains. This means private transactions and balances are only possible as long as the funds remain in the Ren ecosystem. Depositing and withdrawing a conspicuous amount of BTC through a zkTransactor in a short period of time will probably make your transaction easily traceable.
  • Interoperability Layer: Different zkTransactors are created for different blockchains(e.g. a BTC zkTransactor, an ETH zkTransactor, an LTC zkTransactor). These zkTransactors are compatible with each other. As long as both parties have deposited their funds into zkTransactors, they can freely perform cross-chain atomic swaps, trading freely between different cryptocurrencies.
  • Dark Pool Layer: This is the previously mentioned decentralized dark pool, a protocol that privately matches orders in a hidden order book. Eventually this will be open to allow third parties to build their own dark pools with customizable rules to meet various requirements.

The Application Layer allows dApps to be built using all of RenVM’s technology. So far the team has revealed two dApps that will be built on RenVM.

  • RenEX: Republic Protocol’s dark pool is currently up and running in beta form, but will be migrated to RenVM over the course of 2019 to take advantage of its end-to-end privacy and interoperability features.
  • SwapperD: This will be a wallet that interacts with RenVM and an interface that allows users to access Ren’s private cross-chain atomic swap features.

Despite the massive potential opened up by the creation of RenVM, CTO Loong Wang maintains that Republic Protocol’s main focus is still on creating their dark pool, and the creation of RenVM is merely a result of their dedication to making that dark pool as private as possible.

At least in the short term, it seems likely that Republic Protocol will continue to focus on launching their dark pool. However, CEO Taiyang Zhang’s closing remarks in their latest update seem to suggest much loftier long-term goals:

“As the ecosystem grows, and the core components are completed, Ren will introduce development tools to support the open development of private applications of any kind, as well as new products, paving the way for unstoppable privacy.”

— Taiyang Zhang, 18 Jan 2019

Token Utility

REN’s main use at the moment is for the right to run a Darknode. 100,000 REN is required to run each Darknode.

Right now, these Darknodes help match orders that are submitted to the dark pool and are rewarded with transaction fees. This makes REN’s current value highly dependent on the volume of dark pool trading taking place on Republic Protocol.

All Darknodes will be rewarded for contributing to RenVM (Source: Lite Paper)

In the future, Darknodes will be rewarded for facilitating RenVM’s privacy preserving computations. For each computation, all Darknodes will receive an even split of an upfront fee and a variable incentivization fee that can be raised to get special priority from Darknodes.

With the use of zkSNARKs, traders will NOT have to submit a large refundable bond in order to access the network as stated in the 2017 white paper. However, a small REN fee, payable by the trader or a third party, will still be needed to open an order.

REN will no longer be required for all trading fees as suggested in the 2017 white paper. The team announced in April that nodes can be rewarded with the Ethereum or other cryptocurrencies used in the transaction instead.

Token Economics

There is a fixed supply of 1 billion REN tokens with no inflation.

Republic Network raised 35,500 Ethereum from their February 2018 ICO. The token price was $0.0513 USD/0.000055 ETH (private sale) and $0.0561 USD/0.0000581 ETH (public sale).

Token Distribution is as follows:

  • Private Sale: 56.6% (Including 5% early adopter tokens)
  • Public Sale: 8.6%
  • Team and Advisor Tokens: 9.9%
  • Community Development and Partners: 5%
  • Reserve: 19.9%

Contrary to what is stated in their ICO FAQ, the team tokens do NOT have a 2 year vesting period. Instead, the team and advisor tokens will start being unlocked in February 2019 and will continue to be unlocked every four months until February 2020.

The team is using some of their reserve tokens to run bootstrapping Darknodes to help maintain the network. This will also give them some revenue as trading volume picks up.

Overall the team and advisors control 34.8% of the total supply. 56.6% of all tokens went to private sale buyers. This could make it easier for whales who control the majority of the supply to manipulate prices.


The website lists 13 team members and the majority of them had little professional experience prior to joining Republic Protocol. All seven members of the development team (including the CTO) were educated at The Australian National University and many of them only recently graduated around 2018. This is definitely a very young development team that’s looking to prove itself through its code.

Here is some information on some key members of the team:

  • CEO Taiyang Zhang has two years of experience as a software engineer, 3 years of experience as director/co-founder of software development company Neucode, and is a co-founder of the cryptocurrency trading fund Virgil Capital. Though he has accomplished more than most people his age, Taiyang is only in his early 20's and is still relatively unproven as a CEO.
  • CTO Loong Wang has a computer science degree, 1 and a half years of experience as a software developer for Neucode, and 7 months of experience as a researcher at the Australian National University. He also seems quite young and inexperienced, but has the right background and education for his role.
  • Software developer Jaz Gulati was the co-founder of Neucode along with Taiyang Zhang.
  • Backend developer Divya Mary has 2 years and 8 months of experience working as an Application Engineer at Oracle India.
  • Darren Toh is their Head of Communications and Compliance. He has a diploma in corporate law and corporate tax, plus many years of experience in various legal and compliance roles. Since Republic Protocol’s solution will have to be customizable enough to comply with various dark pool regulations in different countries, it is important that they have access to this kind of legal expertise.

There are some notable advisors listed, including:

  • Loi Luu, co-founder and CEO of Kyber Network, describes himself as Republic Protocol’s Technical Advisor. Loi’s expertise should come in handy, since Kyber Network is working on a protocol for decentralized token swaps and Republic Protocol is working on a protocol for ‘dark’ decentralized cryptocurrency trading.
  • Prabhakar Reddy is an investor at venture capital firm Accel Partners, co-founded a successful audio and video-on-demand business that was acquired by BookMyShow, and has an MBA from Harvard Business School. He should be able to give Republic Protocol some valuable business management advice.
  • Advisor Anup Malani is a professor at the University of Chicago Law School teaching law and economics. Anup’s guidance combined with Darren Toh’s legal experience give Republic Protocol a very solid edge on the legal front.

Overall the team has a lot of developers with university training in relevant fields, though they are somewhat lacking in terms of experienced blockchain developers. As their technology continues to mature, they would also benefit from the addition of more members focused on marketing and business development.


Trading Pairs currently available at Ren Exchange

When Republic Protocol showed up in late 2017/early 2018, it was still basically a white paper ICO project. Since then, they have delivered a testnet release, mainnet beta release, a working dark pool exchange built on their protocol, created RenVM, secured a partnership with OTC trading service Wyre, got listed on Binance, and have recently announced the launch of public Darknodes.

Ren Development Plan outlined in their Jan 2019 post

Though they have accomplished quite a bit in one year, there are some important updates still to come for Republic Protocol. Some important milestones are highlighted below, but more details can be found in their Roadmap Update #1 and January 2019 Update.

RenEx’s user referral program is still not available to the general public (Source)
  • Q4 2018: User Referral Program for RenEx
    Though it was planned for the end of 2018, the user referral program for Ren Exchange is still not available to the general public as of January 2019. When this launches, we can expect to see increased marketing activity for RenEx.
An updated white paper should be on its way (Source)
  • Early 2019: RenVM Updates, Updated White Paper
    Republic Protocol have only started releasing details about RenVM with their latest post and release of their Lite Paper. More technical details and an updated white paper are expected. This is still relatively new information and many investors may not yet be aware of Republic Protocol’s new scope. A well-written release or promotional content promoting RenVM could attract many investors to REN.
Wrapped Bitcoin (WBTC) will be an ERC-20 token backed by Bitcoin
  • Jan 2019 : WBTC
    Announced in October 2018, the Wrapped Bitcoin (WBTC) project by BitGo, Kyber and Republic Protocol will create a new ERC-20 token (WBTC) that is backed 1:1 by bitcoin. Republic Protocol will be able to use this new WBTC token to open up more trading pairs between WBTC and other ERC20 tokens. This could help increase trading volume on Ren Exchange and boost income for Darknodes. The plan is for WBTC to be up and running within January of 2019.
CTO Loong Wang offers a sneak preview of SwapperD
  • Q1-Q2 2019: SwapperD Full Release
    No specific release date has been set for SwapperD, but their development plan timeline has it listed before 3rd Party Dark Pools (which should come out by Q2 2019). A pre-release version has already been posted on their Github. This ‘atomic swapper’ tool is an important step towards making atomic swaps accessible and easy for both RenEx and any third parties that want to build on Republic Protocol.
  • Late Q2 2019: Third Party Dark Pools
    Republic Protocol’s RenEx is currently the only dark pool running on their protocol. By the end of Q2 2019, third parties will be able to create their own dark pools using Republic Protocol. This should drastically increase the earning potential of Darknodes and increase $REN’s value.
  • Q3 2019 and Beyond: zkTransaction Layer, Interoperability Layer, Third Party RenVM dApps
    No dates have been set for the release of these features, but these are important milestones that will affect both Ren’s dark pool and privacy-preserving dApp platform. Announcements regarding these technological developments or confirmation of third party dApps (which will pay fees to Darknodes) on Republic Protocol can all be potential price catalysts for $REN.


Centralized OTC/Dark Pool Services
In terms of decentralized dark pools, Republic Protocol currently has no competition. However, there are many exchanges and services that are already offering various OTC and dark pool trading options.

Cryptocurrencies available for OTC trading at Genesis

Some of them include:

These third party services can be regulated by authorities and could provide traditional investors with more peace of mind. They also have the advantage of providing direct fiat options. Investors with large amounts of fiat can send money directly through these brokers to purchase their desired cryptocurrencies.

As a decentralized dark pool, RenEx does not have a bank account that investors can wire their dollars to. However, they did partner with TrueUSD so investors with fiat have the option of converting to TUSD before they can trade on RenEx.

Loong explains how USD-BTC trades can be matched without the need for a stablecoin

That being said, RenEx is not the only exchange that can run on Republic Protocol. Third party brokers and exchanges can build their own dark pool offerings that use Republic Protocol as a private, secure way to find matches for orders before facilitating the trade in whatever manner they choose.

The main advantage Republic Protocol has over traditional third party services is that it is decentralized. Since everything runs on code, there is no way to bribe somebody to receive preferential treatment. Since nobody knows the full order information, it cannot be leaked to anyone to give them a trading advantage. This provides a guarantee of privacy that no regular OTC desk or centralized dark pool could ever offer.

As a global decentralized dark pool, Republic Protocol could also offer the potential for much greater liquidity than current OTC desks that may still need to rely on personal calls and connections, or have to wait for counterparties to come to their desks before they can fill a large order.

However, if these OTC services decide to use Republic Protocol, they could become customers instead of competitors.


The Enigma team is working on creating a protocol that can perform secure multi-party computations, allowing for private smart contracts and privacy-preserving dApps. At the moment, Republic Protocol’s focus is still on creating the best decentralized dark pool protocol they can, but their recent announcement of RenVM makes them a potential competitor for Enigma in the medium to long term future.

Ren’s medium post detailing RenVM was released shortly before a sharp decline in Enigma token prices

Investors certainly seem to view these two as potential competitors. Following Republic Protocol’s post explaining their plans for RenVM, Enigma token prices fell sharply.

In Loong’s speech at Buidl Seoul 2018, he mentions potential uses for RenVM that sound very similar to what Enigma describes on their website, such as privacy-preserving finance and health apps.

Loong discusses the differences between Enigma and RenVM (Source)

Loong points out in the Republic Protocol telegram that RenVM will be more optimized than Enigma to process data streams (such as the stream of orders that will be placed on their dark pool protocol) while Enigma is more focused on general computing. Ren’s Lite Paper even advertises itself as “powering zero-knowledge financial applications”.

Loong also claims that RenVM is more efficient and stable than Enigma, where any node can become a single point of failure.

Enigma CEO Guy Zyskind: “we randomly select a single worker to execute each computation” (Source)

Enigma CEO Guy Zyskind confirms in this post on the Enigma forums that the current testnet implementation of Enigma does allow for a node to become a single point of failure, though he says they plan to address this issue in future updates. Director of Engineering Victor Grau Serrat also clarifies in a subsequent post that a single node going down only results in a delay in the computations (not a total failure).

Enigma’s main focus is the creation of their privacy protocol. It has multiple senior software engineers on their team that each have more than a decade of work experience. Enigma already has many launch partners that are planning to integrate their private smart contract technology. It also has one dApp, Catalyst, that has been built using their platform. Yet Enigma is still not truly production ready. After the delay of their mainnet in September 2018 in order to build more functionality before release, no new mainnet launch date has been set.

Republic Protocol is currently mainly focused on their decentralized dark pool and has a relatively young team. Ren’s Lite Paper also talks more about powering financial applications rather than powering privacy dApps in general. No partners for RenVM have been announced yet.

Enigma seems to be further along in terms of business development and could still have some breathing room while Ren builds out its dark pool, but Ren looks to be quickly catching up in terms of technology.


Republic Protocol’s goal of creating a decentralized dark pool has a lot of great potential. Their young development team has accomplished a lot in the past year, creating a working product in the form of RenEx. Their new RenVM technology has even more potential and can open up many more doors in the privacy-preserving dApp space.

The Ren token’s main use as bonds for Darknodes does not give it much value at the moment due to the low trading volume on RenEx and the Republic Protocol. As support for third party exchanges arrives and third party dApps powered by RenVM are announced, the value of REN should increase greatly.

Current REN prices are well below the ICO private sale price of $0.0513 USD.

Investors who are interested in profiting from the lucrative OTC cryptocurrency trading market or believe in RenVM’s potential can look into securing the 100,000 REN needed for a Darknode as a potential option.

Recommended Resources

Republic Protocol Introduction Medium Post:

Epicenter Interview #230 Loong Wang & Taiyang Zhang: Republic Protocol — A Decentralized & Trustless Crypto Dark Pool:

Republic Protocol Update on RENVM and Lite Paper:

CTO Loong Wang talks about RenVM at Buidl Seoul 2018:

CryptoBriefing Republic Protocol Code Review:

The Birb Nest publication is a facet of the CryptoBirb community. For more information please visit

The Birb Nest

The Birb Nest features experienced analysts from a diverse array of backgrounds. For more information on the CryptoBirb community, please visit

Crypto Penguin

Written by

The Birb Nest

The Birb Nest features experienced analysts from a diverse array of backgrounds. For more information on the CryptoBirb community, please visit

Welcome to a place where words matter. On Medium, smart voices and original ideas take center stage - with no ads in sight. Watch
Follow all the topics you care about, and we’ll deliver the best stories for you to your homepage and inbox. Explore
Get unlimited access to the best stories on Medium — and support writers while you’re at it. Just $5/month. Upgrade