1. Introduction
Republic Protocol (REN) is a protocol for trading a large number of encrypted assets between BTC/ETH, BTC/ERC20 and ETH/ERC20 in distributed dark pools. It is the only protocol known so far. A blockchain enterprise with such distributed encrypted asset dark pool trading technology. In traditional US and European stock markets, dark pool trading accounts for about 10-30% of all industry trading volume. JPMorgan Chase, Goldman Sachs, Fidelity, Deutsche Bank, Morgan Stanley are the few brokers with dark pool trading.
"Dark pool" trading is one of the most important forms of "alternative trading systems". Normally, in exchanges, all sell orders and sell orders will be announced, but institutional investors operate in the "dark pool" through the high-frequency operation of traders. A "dark pool" transaction communicates an "intent" to a particular investor to buy or sell a stock. The original purpose of passing these "intents" was to test whether the order would find a match among a small group of investors, but in fact most of the "enforceable" "intents" ended up closing the transaction without the public knowing .
“The main advantage of dark pool trading is that institutional investors who do large trades can find buyers and sellers without exposure. It can prevent the impact of the entire market and avoid depreciation.
The Republic Protocol system relies on a well-designed incentive system to ensure players abide by the rules. RenEx "Dark Nodes" run a matching engine to ensure the operation of dark pools, and the existence of multiple dark pools will mitigate counterparty risks. In order to prevent malicious attacks , which stipulates that network nodes (Darknodes) must pay 100,000 Ren, which is the Republic Protocol's Token.2. Application scenarios
Republic Protocol's decentralized dark pool ecosystem consists of the following Functional support:
RenEx Dark Pool: Decentralized Dark Pool Exchange;
Secret Order Book: Secrecy details for bulk token orders before transaction execution;
Cross-chain asset trading: trade digital assets between different blockchains;
Dedicated facilities for bulk orders: place bulk orders on the premise of avoiding price declines and affecting the market as much as possible;
Dark nodes: match order fragments, and collect order matching and settlement fees from them.
Decentralized order matching:
Transactions first use the Shamir secret sharing scheme to Orders are split into fragments - 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, the order can be reorganized.
The node plays a matching function, Perform secure multi-party computation on shards of different orders, and mix the results with the results of other nodes (different shard computations). The shards generated by the operation will not reveal the original order, but only represent the result of order pairing.
Because The special design of order fragmentation, the order matching operation can use any function, apply to polynomials, and match two or more orders. Therefore, the order matching operation enjoys high flexibility. The node can match the order according to the exact price, or part of the order. Matching, or matching of multiple trading pairs (for example, if a direct REN/BTC trading pair cannot be found, it can be achieved indirectly through BTC/ETH, ETH/REN and REN/BTC), which helps to improve the circulation capacity.
Transaction execution:
Nodes compete with each other to find matching orders. Matched orders must be registered to let other nodes know the status of the order; relevant transaction parties will also be notified. The order will no longer participate in the matching. The process is carried out on the Ethereum network. Only unmatched orders can participate in the matching; the trader can set a 24-hour validity period or cancel the unmatched orders by themselves. After the order expires or is cancelled, the relevant prepaid fees will be Get it back.
Republic Protocol also includes atomic swaps Agreement, initiated by the counterparty of the matching order group. Nodes are responsible for passing on the information to execute the order; where possible, establish a direct P2P connection between the transacting parties. Due to the limited means of communication between blockchains, transacting parties have no obligation to execute orders. The project believes that access bonds paid in REN tokens can effectively incentivize traders to execute orders.
