What is Republic Network (Republic Protocol)?
Republic Protocol is a decentralized dark pool protocol for trading large volumes of digital assets.
Republic Protocol utilizes secure multi-party computation (“sMPC”) to match orders without exposing the price or volumes of the orders. The Project aims to have its dark pool exchanges support large volume trades, with minimal price slippage and market impact while adhering to the rules of the dark pool.
The Republic Protocol solves this dilemma by merging blockchain technology with Wall Street infrastructure. Team officially launched RenEx, the world’s first decentralized dark pool exchange for cross-chain trading (BTC, ETH, and ERC20), to mainnet.
What is a dark pool?
On most cryptocurrency exchanges, buy and sell orders are broadcasted on a public ledger, also known as an order book. While this structure works for most retail traders, institutional investors and funds manage portfolios worth millions and trade large amounts of volume daily. Publicizing the intention to buy large amounts of an illiquid asset can shift the market drastically and result in slippage, when a market order fills at a different price than originally expected.
- Consuming the order book at different prices ($1.04, $1.05, etc.) to fulfil a buy order can be expensive. E.g. A trader intends to buy 5000 REN at a price of $1.00 each, adding up to $5000. However, the order fills at $1.03 due to execution delays, resulting in a true total of $5150. A slippage of just 3 cents results in an additional $150 of unexpected costs to the trader.
- Even worse, front-runners can move their ask price down to buy up REN ahead of large trades and populate the order book at a wildly higher price.
To counteract this, dark pools are private exchanges where financial assets are traded and matched by an engine running on a hidden order book, often in large-block transactions. On RenEx, this means that trades cannot be observed by any party–including Republic Protocol itself–prior to execution. Anonymity and large trade sizes work hand-in-hand to mitigate market impact, preventing front-running and combating slippage. In the traditional financial world, dark pools move approximately 10–15% (~$27.2B USD) of U.S. stock trades monthly, making this underlying infrastructure a key part of institutional capital movement.
How the Republic Protocol works
Republic Protocol provides an open-source protocol for building a decentralized network of nodes to match orders, without knowing anything about the orders. This is done by breaking orders into cryptographic fragments (separating sensitive data about the order) that are then distributed across the network. Without revealing market intent, nodes work to combine fragments and then match reconstructed orders together. Once an order match is found, an atomic swap is initiated between two traders in a peer-to-peer manner.
In summary, the protocol lays the foundation for:
- Decentralized hidden order book
- Decentralized order matching
- Atomic swap infrastructure for BTC, ETH, and ERC20 cross-chain trading
- Protocol token, REN
As mentioned earlier, this is the blockchain ecosystem’s first decentralized dark pool, making for a unique blend of innovation, financial architecture, security, and compliance. Along with other key players in the space, the Republic Protocol might just be an igniting force in bridging the gap between institutional investors and cryptocurrency.
Key Features of Republic Protocol
The Republic Protocol has various features that contribute to its decentralized dark pool ecosystem as highlighted below:
- RenEx Dark Pool: Decentralized dark pool exchange
- Hidden Order Book: Private orders until execution for large amounts of tokens
- Cross-chain Asset Trading: Trade digital assets cross-chain
- Infrastructure for Large Orders: Place large trades with minimal market impact and price slippage
- Darknodes: Nodes that match order fragments and collect trading fees as order matching and settling rewards
Republic Protocol is competing within the cryptocurrency dark pools space and will be directly comparable to projects specifically offering cryptocurrency dark pools services. Centralized and decentralized exchanges will not be directly comparable with the Project.
What is REN token?
REN token - a native token of Republic Protocol - has two functions:
- It incentivizes node operators to match orders.
- It is used to pay bonds to the Registrar, allowing traders and nodes to participate in the Republic Dark Pool.
- Fees: Traders pay fees in REN when submitting an order. Any node that participates in fragment or order matching receives a percentage of the order fee.
- Bonds: The Registrar is the name of the Republic Protocol’s Ethereum smart contract which organizes network nodes. In order to join the network, traders and nodes must submit a bond in REN for access. This prevents bad actors from joining the network and submitting fake orders.
REN trading on Atomars
REN tokens are available for trading on Atomars exchange with the following trading pairs: REN/BTC and REN/USDT.
About Atomars Exchange
Atomars exchange is a digital assets trading platform launched in June 2019. Atomars exchange is a fast, safe, secure, and user-friendly platform that seeks to make everyone enjoy their time. Most of the popular cryptocurrencies like Bitcoin, Ethereum, Litecoin, and many more are available on the platform. Their web and mobile apps provide ease of easy and fun trading on the go. Unique features include decentralized private user wallets, quick exchange, enhanced user portfolio and market barometer section.