Renegade launches an anonymous DeFi protocol on Arbitrum

Wednesday, September 4, 2024

Renegade, a new decentralised finance protocol (DeFi), introduces anonymous peer-to-peer trading on Arbitrum with onchain dark pools.

What you need to know

Renegade, a DeFi protocol for completely anonymous peer-to-peer trading, has just launched on Arbitrum (read our fundamental analysis).

This launch coincides with the update of Arbitrum Stylus, which now enables Ethereum's layer 2 to support new programming languages such as Rust, in addition to Solidity.

Presentation

Renegade enables the creation of onchain dark pools, a new type of decentralised exchange that enables anonymous trading.

Dark pools exist in traditional finance and are trading venues where the order book is not publicly visible. This allows large traders to carry out their operations without alerting the entire market.

Most blockchains are completely transparent infrastructures, which opens the door to various MEV (Maximum Extractable Value) strategies. A typical example is the sandwich attack: a bot detects your buy order, executes its own before yours, then resells directly after your purchase, thereby worsening the execution of your trade. This transparency of blockchains is not really desired, but stems from their need to be verifiable.

To preserve activity on its protocol, Renegade combines two methods for performing calculations privately while maintaining their verifiability: multi-party computation (MPC) and zero-knowledge proofs (ZKP).

The idea is to allow each user to store the funds and orders associated with their wallet locally. In this way, no third party has access to this information. Only hashes representing 'commitments' are posted onchain, allowing two traders to be matched against each other.

All trades on Renegade are executed at Binance's real-time median price. The main trade-off is between execution quality and execution time. You are always guaranteed to trade at the median price, provided there is a counterparty to take the other side of the trade.

Financing

In February 2023, Renegade raised $3.4m from high-profile investors including Dragonfly Capital, Naval Ravikant (former CEO of AngelList), Balaji Srinivasan, Lily Liu, Tarun Chitra of Robot Ventures, Marc Bhargava of Tagomi and Lev Livnev.

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This analysis is not investment advice. It has been prepared without taking into account your personal situation, particularly your financial situation, risk profile, and investment objectives.

Before investing in any product, investors should fully understand the risks involved and consult their own legal, tax, financial, and accounting advisors.

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