Best General RenVM Questions of March 2020
\These questions are sourced directly from Telegram*
Q: How do I shutdown my Chaosnet Darknode?
A: Please follow these directions: https://docs.renproject.io/chaosnet/chaosnet-darknode/untitled-3
Q: Can I run a Chaosnet Darknode and Mainnet Darknode at the same time (on the same computer).
A: No, if you want to do that you’ll have to run them on separate computers.
Q: You mentioned DCEP in your latest piece and "12 App Ideas", but it's going to run on a centralized private network. The Bank of England also just released a report on how they're thinking about their CBDC and DLT/centralization, and stress that a DLT could add resilience, but there's also no reason a currency couldn't be more centralized. The Block reported that other central banks (like the EU and Singapore) are considering third-party chains like Corda. Can you comment on which CBDC designs may or may not be compatible with RZL? You previously said "RZL sMPC provides ECDSA signatures because that’s what it is used by Ethereum, Bitcoin, etc. Whatever solution they come up with, will be the solution that RZL has to be upgraded to use (the whole point of RenVM is not to tell other chains how to do things, and still provide interop; this means waiting on them to define their solution and then working with that)." So, what does centralization mean for RZL, and how can we think about compatibility between these designs on the technical side?
A: The topic of centralisation in interoperability comes down to the compounding effect of using multiple networks. Put another way “you’re only as decentralised as your most centralised component”. While there are nuances to this, the core idea rings true.
RenVM can be used to interoperate many different kinds of chains (anything using ECDSA, or naturally supporting lively threshold signatures) is a candidate to be included in RenVM. However, a centralised currency that has been bridged to a decentralised chain is not decentralised. The centralised entity that controls the currency might say “nothing transferred to/from this other chain will be honoured”. That’s a risk that you take with centralised currencies (take a look at the T&Cs for USDC for example).
The benefit of RenVM in these instances is to become a standard. Short-term, RenVM brings interoperability to some core chains. Medium-term, it expands that to other more interesting chains based on community demands. Long-term, it becomes the standard for how to implement interop. For example: you create a new chain and don’t worry about interop explicitly because you know RenVM will have your back. For centralised currencies this is still advantageous, because the issuing entity only has to manage one chain (theirs) but can still get their currency onto other chains/ecosystems.
From a technical perspective, the Darknodes just have to be willing to adopt the chain/currency.
Q: dApps will have their own risk tolerances for centralized assets. Eg USDC was a bigger deal for MakerDAO than Uniswap. If CBDC liquidity were suddenly bridgeable, some dApps would be more eager to adopt it than others - even despite the risks - because they provide native liquidity and can be used to store/hedge in it without cashing it out. My question is more technical as it relates to RenVM as the "Universal Stablecoin Converter". You sound convinced that RenVM can bridge Libra, DCEP, maybe other CBDCs in the future, but I'm skeptical how RenVM works with account-based currencies. (1) Are we even sure of DCEP's underlying design and whether it or other CBDCs even plan to use digital signatures? And (2) wouldn't RenVM need a KYC-approved account to even get an address on these chains? It seems like DCEP would have to go through a Chinese Circle, who would just issue an ERC20.
A: As far as underlying blockchain technology goes (eg the maths of it) I don’t see there being any issues. Until we know more about whether or not KYCd addresses are required (and if they are, how they work), then I can’t specifically comment on that. However, it is more than possible not to require RenVM to be KYCd (just like you can’t “KYC Ethereum”) and instead move that requirement to addresses on the host blockchain (eg KYC Ethereum addresses for receiving the cross-chain asset). Whether this happens or not would ultimately be up to whether the issuer wanted interoperability to be possible.
Q: In that scenario, how would RenVM even receive the funds to be transferred to the KYC'd Ethereum address? For Alice to send DCEP to Bob's KYC'd Ethereum address, RenVM would need a DCEP address of its own, no?
A: Again, this is impossible to say for certain without knowing the implementation of the origin chain. You could whitelist known RenVM scripts (by looking at their form, like RenVM itself does on Bitcoin). But mostly likely, these systems will have some level of smart contract capabilities and this allows very flexible control. You can just whitelist the smart contract address that RenVM watches for cross-chain events. In origin chains with smart contracts, the smart contract holds the funds (and the keys the smart contract uses to authorise spends are handled as business logic). So there isn’t really a “RenVM public address” in the same sense that there is in Bitcoin.
Q: The disbonding period for Darknodes seem long, what happens if there is a bug?
A: It’s actually good for the network to have a long disbonding period in the face of a bug. If people were able to panic sell, then not only would the bug cause potential security issues, but so too would a mass exodus of Darknodes from the network.
Having time to fix the bug means that Darknodes may as well stick around and continue securing the network as best they can. Because their REN is at stake (as you put it) they’re incentivised to take any of the recommended actions and update their nodes as necessary.
This is also why it’s critical for the Greycore to exist in the early days of the network and why we are rolling out SubZero the way that we are. If such a bug becomes apparent (more likely in the early days than the later days), then the Greycore has a chance to react to it (the specifics of which would of course depend on the specifics of the bug). This becomes harder and slower as the network becomes more decentralised over time.
Not mcap, but the price of bonded Ren. Furthermore, the price will be determined by how much fees darknodes have collected. BTW, loongy could you unveil based on what profits ratio/apr the price will be calculated?
This is up to the Darknodes to governance softly. This means there isn’t a need for an explicit oracle. Darknodes assess L vs R individually and vote to increase fees to drive L down and drive R up. L is driven down by continue fees, whereas R is driven up by minting/burning fees.
Q: How do you think renvm would perform on a day like today when even cexs are stretched. Would the system be able to keep up?
A: This will really depend on the number of shards that RenVM is operating. Shards operate in parallel so more shards = more processing power.
Q: The main limiting factor is the speed of the underlying chain, rather than RenVM?
A: That’s generally the case. Bitcoin peaks at about 7 TPS so as long as we are faster than this, any extra TPS is “wasted”. And you actually don’t want to be faster than you have to be. This lets you drop hardware requirements, and lowering the cost of running a Darknode. This has two nice effects: (a) being an operator generates more profit because costs are lower, and (b) it’s more accessible to more people because it’s a little cheaper to get started (albeit this is minor).
Q: Just getting caught up on governance, but what about: unbonded REN = 1 vote, bonded REN = (1 vote + time_served). That'd be > decentralization of Darknodes alone, an added incentive to be registered, and counter exchanges wielding too much control.
A: You could also have different decaying rates. For example, assuming that REN holders have to vote by “backing” the vote of Darknodes:
Let X be the amount of REN used to voted, backed behind a Darknode and bonded for T time.
Let Y be the amount of time a Darknode has been active for.
Voting power of the Darknode could = Sqrt(Y) * Log(X + T)
Log(1,000,000,000) = ~21 so if you had every REN bonded behind you, your voting power would only be 21x the voting power of other nodes. This would force whales to either run Darknodes for a while and contribute actively to the ecosystem (or lock up their REN for an extended period for addition voting power), and would force exchanges to spread their voting out over many different nodes (giving power back to those running nodes). Obviously the exchange could just run lots of Darknodes, but they would have to do this over a long period of time (not feasible, because people need to be able to withdraw their REN).
Q: Like having superdelegates, i.e, nodes trusted by the community with higher voting power? Maybe like council nodes
A: Well, this is essentially what the Greycore is. Darknodes that have been voted in by the community to act as a secondary signature on everything. (And, interestingly enough, you could vote out all members to remove the core entirely.)
Q: Think the expensive ren is a security feature as well. So, doubt this would impact security potentially? I don’t know. I wouldn’t vote to cut my earnings by 40% for example lol
A: It can lead to centralisation over time though. If 100K REN becomes prohibitively expensive, then you will only see people running Darknodes that can afford a large upfront capital investment. In the mid/long-term this can have adverse effects on the trust in the system. It’s important that people “external” to the system (non-Darknodes) can get themselves into the system. Allowing non-Darknodes to have some governance (even if it’s not overall things) would be critical to this.
Q: That darknode option sounds very interesting although it could get more centralized as the price of 100k Ren rises.For instance dark nodes may not want to vote to lower the threshold from 100k to 50k once Ren gets too expensive.
A: A great point. And one of the reasons it would be ideal to be able to alter those parameters without just the Darknodes voting. Otherwise, you definitely risk long-term centralisation.
Q: BTC is deposited into a native BTC address, but who controls this address (where/how is this address’s private key stored)?
A: This is precisely the magic behind RenVM. RenVM uses an MPC algorithm to generate the controlling private key. No one ever sees this private key, and no one can sign things with it without consensus from everyone else.
