renBTC (RENBTC) is an ERC-20 cryptocurrency that is backed by Bitcoin in a 1:1 fashion. It is issued by Ren (REN) and allows users to wrap their Bitcoin and transact on the Ethereum network.
RenBTC is generated when a user sends Bitcoin to a RenVM address on the Bitcoin blockchain. That BTC is locked and renBTC is to be minted to a designated wallet on the Ethereum blockchain. The bitcoin isn't stored in a centralized or trusted custodial setup, it is stored in a network of decentralized nodes called Darknodes that can only be run by someone with a stake of 100,000 REN tokens.
Users can redeem BTC by burning renBTC on Ethereum. The locked BTC will be released to a designated Bitcoin address after the renBTC token burn is confirmed. The system was described by CTO Loong Wang:
"Any asset minted on Ethereum by RenVM is a 1:1 backed ERC-20. This means that if you have 1 renBTC (an ERC-20), you can always redeem it for 1 BTC. It's a direct supply peg. renBTC isn't a synthetic, it doesn't rely on a liquidation mechanism, and it's not the price of Bitcoin on Ethereum. It is a one to one representation of Bitcoin on Ethereum that can be redeemed for BTC at any time, in any amount"
Ren also supports renBCH and renZEC.
RenBTC went live in mid-May of 2020. Kain Warwick of Synthetix was the first person to hold an entire Bitcoin in renBTC. When renBTC was reportedly launched, it was not yet compatible with Ethereum, CEO of Ren (REN), Taiyang Zhang, said:
"While the smart contracts have been deployed on Ethereum, RenVM itself is not actually on mainnet. This is because RenVM is a distinct network separate to Ethereum. The final mainnet subzero version of RenVM won’t be deployed until later. The minted renBTC so far has been from our own internal testing [and] Kain from Synthetix testing the system. The public hasn’t been able to mint renBTC thus far.”
Shortly after launch, there was a minor controversy due to all renBTC funds being held in a centralized wallet. In late August of 2020, there were $200,000,000 in user funds being held by a single entity. CTO Loong Wang explained that it was a precaution for such a grandiose project in an early stage:
"During these early days, the nodes are operated by our team. In theory, we could act maliciously. But, as we expand to more members, and begin replacing these nodes, this stops being possible. Even now, 5x of these nodes would need to be compromised for anything bad to happen."
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