Before diving into the analysis, I will briefly summarize for you an overview of Ren Protocol.
Ren Protocol (formerly Republic Protocol) was developed in 2017 and initially focused on trustless OTC trades. OTC brothers can simply understand as a P2P transaction and will not affect the market price of the token being traded.
However, then Ren Protocol carried out Rebrand and got its current name and the goal is to focus on developing Interoperability or interoperability, a platform that allows you to trade tokens between different blockchains securely. trustless and decentralized.
The project launched the Mainnet in May 2020 and allows the conversion of BTC, Bitcoin Cash and Zcash to the ERC 20 network through the Wrapped and Ren Virtual Machine (RenVM) mechanism.
RenVM is a network powered by decentralized virtual machines. These virtual machines are called Darknodes, and they work together to provide power, contribute bandwidth, and make the network more secure.
Darknodes will receive a portion of the trading volume of tokens on the Ren Protocol platform.
You will wonder, how is Ren Protocol's solution different from WBTC?
The answer lies in decentralization, Ren's solution allows you to Wrapped BTC or any other supported token while WBTC requires you to KYC and will keep your BTC on BitGo ( roughly centralized).
What makes REN undervalued?
At the time of writing this article, REN has increased 3 - 4 times even 8 times when reaching ATH after having information about integration with Binance Smart Chain.
So why do I still say REN is currently undervalued, in my opinion the key word here is REN Holder's Incentives or the benefits of REN Holders.
Let's take a look at REN's Tokenomic first, the total supply of REN is 1,000,000,000 and the circulating volume is now over 88.1% which will help REN relieve the pressure on token inflation.
In addition, out of more than 881 million REN Tokens, there are 188 million tokens put into Staking Darknodes.
In my opinion, the number put into Staking will continue to increase, which will increase the Demand Side of REN, the reason I will explain below.
Staking is the only utility of REN, at first I was also quite disappointed when REN only had one Use case, which was Staking into Darknodes to receive Rewards.
However, after researching more closely and watching the interview with the CTO of the Loong Wang project, I changed my mind about this.
Loong Wang explained that price fluctuations need to be minimal to protect the security of the system, because adding another use case can make the REN token price hotter. This will make it difficult for those who want to Staking Token REN to make Darknodes, as well as make it difficult for old Darknodes Unstake to sell tokens, thereby adversely affecting the network.
One thing you should note is that when Stake Token REN to run Darknodes, you will receive a reward of Fee (this Fee is the converted Token, not REN).
Simply put, you can understand that Stake REN brothers make Darknodes, have users lock BTC to mint renBTC, you will receive a reward of BTC.
Cooperation with several DeFi projects
In February and March, Ren announced cooperation with a number of DeFi projects to attract more users to use Ren's solution, I will list some prominent names for you.
Perpetual has added the REN/USDC trading pair on its platform, it is worth noting that currently there are only 10 trading pairs on Perp so this helps the Perp community to pay more attention and learn about Ren.
You can use renBTC to mint assets such as sUSD, sETH, sBTC to trade on Synthetix's platform.
Synthetix is a leading Derivatives and Synthetic Assets platform in the DeFi market, this partnership benefits both parties as Ren will be supported to increase the number of users and transaction volume; The Synthetix platform will also benefit from exposure to abundant liquidity from other Blockchains.
And there are many other projects that Ren Team cooperates with to step by step realize their ambition, you can refer to below:
Ren Ecosystem Update March 2021
Ren Ecosystem Update February 2021
Ren Team announced that it will participate in Alameda, whereby Ren Protocol will prioritize integrating Solana into its project. The team expects that it will be possible to start having assets minted from renVM to Blockchain Solana in Q2.
In addition, this cooperation will help Ren Protocol accelerate the deployment of Phases to move towards a fully Decentralized network (Currently Ren is still having problems with Decentralization, I will go deeper in the later of this post. Write).
By acquiring Ren, I think it will bring benefits to both Ren and Solana Ecosystem