Republic Protocol (REN) is a protocol for trading a large number of encrypted assets between BTC/ETH, BTC/ERC20 and ETH/ERC20 in a distributed dark pool. It is the only one known to have such a distributed encrypted asset dark pool transaction. Blockchain technology enterprise. In traditional U.S. and European stock markets, dark pool trading accounts for about 10-30% of all industry trading volumes. JPMorgan Chase, Goldman Sachs, Fidelity, Deutsche Bank, and Morgan Stanley are the few brokers with dark pool transactions.

"Dark pool" trading is one of the most important forms of "alternative trading systems". Normally, when trading on exchanges, all sell orders and sell orders will be announced, but institutional investors operate in the "dark pool" through traders' high-frequency operations. "Dark pool" transactions convey an "intent" to buy or sell a stock to specific investors. The original purpose of passing these "interests" was to test whether the order could find a match among a small number of investors, but in fact most of the "executable" "interests" ended up closing the transaction without the public's knowledge .

"The main advantage of dark pool trading is that institutional investors who conduct large transactions can not be exposed when looking for buyers and sellers. It can prevent the entire market from being affected and depreciation.

The Republic Protocol system relies on a well-designed incentive system to keep players abiding by the rules. RenEx "Dark Nodes" run the matching engine to ensure the operation of the dark pool, and the existence of multiple dark pools will reduce the risk of the counterparty. In order to prevent malicious attacks, it is stipulated that network nodes (Darknodes) must pay 100,000 Ren, which is the Token of the Republic Protocol.

1. Project introduction

The main technical goal of the Republic Protocol is to ensure the operation of network nodes such that transactions on exchanges are processed and executed without revealing information about themselves. Republic Protocol uses Shamir's encrypted sharing scheme to split orders into multiple pieces that are distributed across the network. The original order cannot be recreated without collecting most of the shards. To prevent malicious behavior of these shard orders, Republic Protocol employs smart contracts called "Registrars", which are aggregated in the network topology of network nodes.

Project Features

1. The identity of the trader is safe with Republic Protocol. The underlying cryptocurrencies being traded may offer different privacy constraints.

2. Traders do not have to remain connected to the network while orders are matched. Once an order is placed, the node will run matching calculations until a match is found, or the order expires (either manually or via a deadline specified by the trader).

3. Orders are secured until matched. After matching, some details of the order will be displayed to the matching party. Since both parties know this is a natural limitation of order security what they submit, both parties need to know when a race has occurred. Note that the information disclosed in these cases does not provide any party with any informational advantage.

2. The total liquidity of the Republic Protocol cannot be reasonably estimated by any participant

Application scenario

Republic Protocol's decentralized dark pool ecosystem is supported by the following features:
RenEx Dark Pool: Decentralized Dark Pool Exchange;
Stealth Order Book: Orders for bulk tokens before trade execution Confidential details;
Cross-chain asset transactions: trade digital assets between different blockchains;
Special facilities for bulk orders: Place bulk orders while minimizing price declines and affecting the market;
Dark Node: Matching order fragments, from which order matching and settlement fees are collected.

Technical Overview

Decentralized order matching:
The transaction party first splits the order into fragments through Shamir's confidential sharing scheme-these fragments contain some sensitive data of the order and will not reveal the value of the order. Only when more than half of the order fragments are collected can the order be reorganized.

Nodes play a matching function, perform secure multi-party calculations on fragments of different orders, and mix the results with the results of other nodes (different fragment calculations). The fragments generated by the operation will not reveal the original order, but only represent the result of order pairing.

Due to the special design of order fragments, order matching operations can use any function, apply to polynomials, and match two or more orders. Therefore, the order matching operation enjoys high flexibility. Nodes can match orders based on exact prices, partial matches, or multiple transaction pairs (for example, direct REN/BTC transaction pairs cannot be found, which can be reached indirectly through BTC/ETH, ETH/REN, and REN/BTC), Helps improve circulation capacity.

Execution:
Nodes compete with each other to find matching orders. Matched orders must be registered to let other nodes know the order status; relevant trading parties will also be notified. Any paired orders will no longer participate in the matching. The process takes place on the Ethereum network. Only unmatched orders can participate in matching; traders can set up a 24-hour validity period or cancel unmatched orders by themselves. After the order expires or is cancelled, the relevant prepaid fees will be refunded.

The Republic Protocol also includes atomic swap protocols, initiated by parties matching order groups. Nodes are responsible for passing on information to execute orders; where possible, establishing direct P2P connections between trading parties. Due to the limited means of communication between blockchains, parties to a transaction are not obliged to execute an order. The project believes that access bonds paid in REN tokens can effectively incentivize counterparties to execute orders.

Order Fee:
When submitting an order, the transaction party must pay the transaction fee in REN tokens. If the order is not matched within the time limit, the handling fee will be returned to the transaction party. Nodes participating in decentralized computing can obtain commission dividends (shared equally among all participating nodes) by matching orders. Fees vary in value; the one with the highest price will be given priority by the nodes. After the transaction is concluded, the node will get the transaction fee from both buyers and sellers. The only order information that nodes can obtain is the transaction fee for successful pairing.

RenEx beta mainnet currently adopts a single fee model, charging buyers and sellers of each transaction a uniform fee of 0.2%. Therefore, each transaction will incur a 0.4% commission. 80% will be shared by nodes; the remaining 20% ​​will be kept by RenEx for the circulation reward program (returns to market makers and sources of liquidity, thereby stimulating the growth of the platform’s circulation capacity). RenEx tariffs are temporarily set by the Republic Protocol team in order to maintain the competitiveness of RenEx.

Bond:
The order is split into several fragments and spread in the network to ensure the security of order information. In order to prevent sybil attacks and simplify the identity authentication mechanism, transaction parties and nodes must purchase bonds with REN tokens to obtain network access. The unique identity linked to the bond is registered in the smart contract of the agreement, and anyone can query the registration status. When the transaction party or node exits the network, the bond will be returned in full. If the network detects malicious behavior, the corresponding bond will be seized, and the network security will be maintained through the reward mechanism.

The transaction party can submit the bond amount at will; the bond amount is proportional to the number of orders placed at a time. The bond threshold is flexible and expensive, and participants need to pay a sufficiently generous financial commitment. The bond amount submitted by transaction parties and nodes must reach a threshold value before they are allowed to participate in network activities.

The mechanism for setting bond thresholds is still under development. The project plans to set the threshold of dark nodes as 100,000 REN, which means that the maximum number of dark nodes is 10,000, because the total token supply is 1,000,000,000 REN. The bond amount can be changed by the contract owner (while changing the maximum number of nodes). Republic Protocol mentioned that the threshold of the bond will eventually be controlled by the decentralized autonomous organization (DAO), which will be decided by voting to play the management purpose of the REN token.

Three. Comment

The main technical goal of Republic Protocol is to enable a decentralized network of nodes to match orders. While it may seem impossible, it can be achieved by applying cryptography techniques that have been thoroughly researched for 30 years, modifying them for the world of decentralized computing.

Republic Protocol uses the Shamir secret sharing scheme to break orders down into a large number of order fragments and distribute them throughout the network. The order cannot be reconstructed unless most of the sequential fragments are reassembled. In order to prevent this from happening, Republic Protocol defines an Ethereum smart contract called a registrar, which organizes nodes into a network topology that enables an adversary to get enough order is unreasonable shards to rebuild the order. As long as traders respect the network topology defined by the registrar, their orders will be safe.

Using order shards from two different orders, one node can keep other nodes cooperating with other nodes. In order to execute the same two orders to perform a distributed calculation, this will determine whether the two orders match. Decentralized computing does not expose order shards, and performs a random scaling of the final output. This prevents nodes from reconstructing the original order preventing them from using the output to infer anything about the order. Zero-knowledge proofs are used to verify the integrity of computations without revealing any information. These proofs are simple and efficient, allowing them to be enforced by an Ethereum smart contract called Judge. After the two orders are matched, an atomic swap is initiated between the two traders on the Republic Protocol Network, a decentralized peer-to-peer network, where the details of the atomic swap are kept secure using standard asymmetric encryption.

Related Links:

https://renproject.io/
https://medium.com/renproject
https://www.chainnews.com/articles/745459795256.htm
https:/ /help.bybit.com/hc/zh-cn/articles/360024861754-%E4%BB%80%E4%B9%88%E6%98%AFRepublic-Protocol-%E4%BB%80%E4%B9%88 %E6%98%AFREN%E5%B8%81-