It is now possible to mint ZEC on mainnet Ethereum as an ERC-20 token, which for instance be traded against any ERC-20 token on Uniswap if you create a pool for it (which is completely permissionless). When other DeFi protocols add it you could take borrow or lend ZEC, use it as collateral, do leveraged trading with it etc., which is pretty cool.
The token can always be redeemed 1:1 for ZEC at any time minus fees.
I had a brief look at the documentation. renZEC itself is basically equivalent to ZEC in transparent addresses. They provide a transparent address to send ZEC to when converting to renZEC, and AFAICT there should be nothing stopping you from sending from a shielded address for that.
It is unclear whether they allow you to specify a shielded ZEC address to receive ZEC on when converting renZEC to ZEC. If they are using the same transaction building library for Bitcoin and Zcash support, then it’s likely they don’t have the ability to create Sapling outputs yet - but that is something they could add (or have already added) using the Rust crates. It would be great for someone to test this!
Yes exactly, you can only mint to and release from a transparent at the moment, but as far as I am aware the intention from the team is to get shielded address support for minting and releasing. In the mean time, if one were to mint renZEC and is concerned about transaction trails, one could make use of an on-chain trustless Ethereum mixer like Tornado Cash, which hopefully adds ren-wrapped tokens soon including renZEC. Aztec protocol has also been building a lot of tools for privacy wrappers for Ethereum tokens (there already is zkDAI out I think), which could be used to wrap renZEC so you’d get zero-knowledge wrapped ZEC tokens on Ethereum.
Another interesting point is that because RenVM acts as an “off-chain” decentralized custodian of assets on whatever chain is supported, minting and burning can be done on other smart-contract capable chains as well (when that functionality is built out), meaning we can get ZEC on Cosmos and Polkadot as well. And it would be possible to go from Ethereum-renZEC to Cosmos-renZEC in just one transaction, because you don’t need to transfer the ZEC held by RenVM, you only need to burn on one chain and mint on the other.
Sorry for late reply. The usecase is accessing all the money legos that are available in the Ethereum ecosystem, like DEX trading, lending/borrowing, index pools etc. Of course this also requires a fair amount of liquidity being bridged over before those things could take off.
Because you could burn renZEC to ZEC at any moment, it would be an arbitrage opportunity of renZEC fell in price in comparison to ZEC as traded on centralized exchanges. If the price went over 1:1 you could buy ZEC and mint renZEC and bring back the price that way for a profit as well.
$26k liquidity exists in the renZEC - ETH pair on Uniswap (Uniswap Info)
While this isn’t much, it is a nice start. If wrapped ZEC were to become more liquid and traded on Ethereum, one thing I could do is to push ZEC to be added as a collateral type for vaults in MakerDAO. We are currently in the process of getting renBTC integrated and voted in as a collateral type in MakerDAO, and the only meaningful difference between renBTC and renZEC as tokens that can be used as collateral, is the liquidity.
The RenVM network is also progressing in becoming more decentralized. Community governance will soon be deployed, and more non-team members are to be added to the temporary permissioned validator set this year, the validator set that manages the custody of the assets while the network is in bootstrap phase and where the parameters that affect network security will be tested and calibrated.
This token mint/burn stuff, I have had some other people talking to me about it recently. Do you know what the SEC makes of it? we had issues trying to put a burn mechanism in the dev fund zip. - Specifically the SEC was very concerned with the burn aspect - I am not sure of the implications for a token though.
Can you explain a bit more about how it works please.
The mint/burn could potentially have tax concerns in certain countries, but should not have any implications with the SEC (I’m not a lawyer, not advice), since we are not changing the supply of any asset, we are just wrapping and unwrapping. It is not a burn in the normal “token supply burn” sense, it is really just wrapping/unwrapping, or lock/release if you prefer that.
Update: per the CTO of Ren:
our lawyers have given us the all clear that renTokens are not securities if the token itself (eg BTC) is not a security
So since last week, ZEC passed the MakerDAO community greenlight poll with flying colors, 99.69% of the votes in favor! So this means that the domain teams over at MakerDAO will review it as a candidate collateral asset, meaning it could be used for generating the stablecoin DAI on Ethereum (useful if you would like to take a loan against your ZEC, if you want to trade leveraged etc.).
ZEC liquidity on Ethereum has also been growing nicely, there is current
that has been brought over, but there is a lot of room for growth as well! With enough liquidity you could be trading ZEC without the need of a centralized exchange at all, all you’d need to do is wrap to Ethereum and trade at Uniswap for instance, or you could buy renZEC on Uniswap using an asset you own on Ethereum, and unwrap to ZEC which you could move to a shielded address for privacy.
As an experiment, this past weekend I wrapped 0.75 ZEC into renZEC. It was easy and fun!
But then I naively thought, “I’ll create the first ever renZEC/USDC pool on Uniswap just for fun, with just a small amount of money (0.25 renZEC and 15.50 USDC), so I can learn how to use Uniswap!”
Got all the way to the last step . . . at which point my nascent defi dreams were dashed against the rocks and shattered into a million pieces: The ETH transaction fee for the final interaction with the Uniswap smart contract was over $50! More than the total amount money was I planning to put in the pool!
Hate when that happens! DeFi isn’t always super friendly to the masses. Whales don’t care about the fees when they’re making large returns, but I’m just a frog .
I saw the thread from zooko’s tweet and thought I’d drop by. I use “https://9000.hal.xyz/recipes/chainlink-track-gas-price” and set a gas price alert for when prices drop and do most of my transactions during those periods. I also check ethgasstation.info before confirming a transaction to make sure I’m using the right amount of Gwei.
Yeah creating new pools on Uniswap is expensive, would not recommend to do this on your own unless you really want to, or think you could make the fees back quickly from arbing the pool when others trade through it.
The advantage is accessing applications on Ethereum, so for instance, people have wrapped BTC and put it in lending and trading pools on Ethereum and earned yield on their BTC. Same could be done with ZEC, but you don’t get anything by default from RenVM (it takes a wrapping fee to pay for the service and for the security of the protocol), you decide yourself how you put your capital to work after it has been wrapped.
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