Wonder if the price of renZEC token will stay 1:1 pegged with ZEC, since they have different capabilities.
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.
Some stats today:
919 ZEC is wrapped on Ethereum (https://mainnet.renproject.io/renvm)
$26k liquidity exists in the renZEC - ETH pair on Uniswap (https://uniswap.info/pair/0xe6c804ff4ec692e6808c0d032cdbc03772fc4d42)
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
Just saw this on the Maker governance platform: https://vote.makerdao.com/polling-proposal/qmzfpbnvhqezxv6b2enrltdehq3ybthavj73gyvk5fvubz
It is a Community Greenlight Poll for renZEC to be reviewed by the domain teams of MakerDAO, it currently has 94% of the votes in favor.
Down the line if this passes the executive vote, you would be able to take out a loan against your ZEC, which is fantastic!
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!
Looking forward to ETH 2.0 . . .
Interesting, I’m curious, is there any advantage to the user who locks up thier ZEC? Such as interest or tx fees?
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.
Looks like all the liquidity in the uni-pool is just from one individual about a day ago.
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.
Indeed. Notably the Ren and UMA teams recently joined forced to create an incentivized pool for renBTC. They could likely do the same for renZEC given sufficient interest from ZEC holders.
zUSD backed by renZEC?
You could do this, all the DeFi primitives are there!
Hey all - back again to share some news. The information is summarized in my tweet to zooko.
Basically, a couple of Ren community members submitted applications on behalf of ZEC and BCH communities to enable rewards or renZEC and renBCH in [Balancer Labs]. So far, nobody with renZEC has created or contributed to a liquidity pool; however, as an example, one person in the BCH community contributed $168k in $renBCH and received 57 $BAL ($845) in 1 week which is roughly an instable ~26.2% APY.
So far, it seems renZEC’s primary use case is in Balancer for these rewards; however, we’re trying to have more protocols onboard renZEC, and we’re making progress with MakerDAO (money market DeFi protocol) to support renTokens as collateral. We had a zoom video call with them yesterday where Loong, the Ren CTO, presented to their community.
Feel free to reach out if you have any questions about any of this. If I don’t respond quickly here, you can reach me on Twitter or in the [Ren Telegram].
Is there any double spend or total coin count risk to ZEC when using renZEC?
All renZEC is backed 1:1 with native ZEC. Of course someone could try double-spending ZEC, but then it would make more sense to target a centralized exchange with high ZEC trading volume, than RenVM. If a double-spend attack would be successful, Ren governance could bring back the peg 1:1, although it would not be able to act fast, as decentralized governance is what decentralized governance is.