Renegade is a startup company which attracted the attention of investors recently with its ICO RNG. Also, his team is currently developing an on-chain version of an obscure group. The latter is a well-known trading venue in traditional financial markets. It is based on zero-knowledge proofs and multipart computation (MPC).
However, Renegade aims to create a new product using the advantages of the old one. Their platform will maintain complete anonymity during a trade, unlike traditional exchanges. Additionally, the team plans to use peer-to-peer order comparison. It will employ secure multi-party computing, along with atomic settlement of paired orders to achieve that goal. The company claims that third parties will not be able to obtain any information about customers’ token balances, trading history, or pending orders. He also hopes that such a policy will lead to higher quality trade execution.
The Renegade team noted that non-custodial trading currently suffers from several issues, chief among them being miner mineable value, pre-trade transparency, post-trade transparency, and address discrimination.
Defi traders, who are familiar with the market, know that block producers and sequencers can usually see full transaction information. That allows for the possibility of arbitrary reordering, delay, fast-forward, and commercial censorship.
In addition, non-tradeable trades based on a limit order book are also visible to all third parties. The latter can easily access the history of the entire state. Such a situation allows them to track and trace various business activities.
Market participants can see the source address (which is actually a pseudonymous identity) of all pending orders. All of this makes it easy for scammers to help themselves with merchants’ money. Furthermore, trade execution often suffers due to these failures, especially when whale traders try to make a profit.
What is the dark pool?
A dark pool is a common feature used in traditional financial markets. Its legal name is “alternative trading system”. Dark pools are essentially off-market trading venues that offer better privacy protections for users. They work much like the more familiar “lit” exchanges, such as NASDAQ or NYSE.
However, there is a big difference. The order book is not visible to the public. Therefore, investors and traders cannot see the pending quotes of other market participants. Only those who use a dark pool will get information about matches on their own exchanges. Thanks to such a system, traders will be able to privately search for a counterparty. They will not need to broadcast their trading intentions to the broader market and risk missing out on opportunities in the process.
Additionally, investors often use dark funds to enjoy better trade execution in large blocks of various stocks. Had they tried the same thing on an enlightened exchange, insufficient liquidity would lead to a significant price hit, as well as inter-exchange arbitrage. That means that traders would lose money instead of making it, or at least not make much of it.
Some investors use TWAP style orders while using the illuminated market. Still, statistical arbitrageurs often spot such patterns, resulting in money losses for traders.
Renegade also noted that while blockchains offer many advantages, all activities are visible to any interested party. That may sound cool, but some of today’s decentralized exchanges have been known to leak data. That is definitely not a good result for investors.
What is Renegade’s solution?
Renegade decided to create a non-custodial dark group to solve the four main problems plaguing the market. It will allow clients to hide all information about the status of the exchange. Zero-knowledge proofs will guarantee this.
Furthermore, the team noted that this platform works like a CLOB-style DEX. But unlike the latter, it uses a distributed, encrypted order book. Thanks to such a system, matches between traders’ orders are inferred through a multi-party calculation that is cryptographically secure.
Once the platform finds a match, it performs settlements of exchanged tokens through zero-knowledge proofs, hiding all trading information while maintaining system consistency.
The company is using Ozdemir’s SNARK collaborative framework to implement its hybrid MPC-ZKP match-settle architecture. Renegade is also planning to launch its ICO soon. The Renegade ICO is one of the top ranking projects on various ICO trading platforms. While still new to the market, he has exciting ideas and an experienced team to execute them. The company has already presented its well-developed roadmap. The initial coin offering will also start soon. Overall, Renegade has a good chance of succeeding in the Defi space.
