Republic Protocol Cryptocurrency Review

Republic Protocol (REN) Overview

As the world embraces blockchain technology, more and more different digital assets based on cryptography, known to the world as “cryptocurrencies” (although many of them are completely are not currency, even for their intended purpose). Be that as it may, of course, Bitcoin (BTC) and Ethereum (ETH) are the pillars of the entire industry, whose capitalization is much, much larger than their neighbors on coinmarketcap.

Huge trading volumes on pairs with Bitcoin and Ethereum, coupled with the announcement of the Bitcoin futures market on CME Group and NASDAQ, etc. Many events related to the adoption and use of developments in the crypto industry have generated unprecedented interest on the part of major players. In previous article we talked in more detail about the situation in the crypto world and outside, this time we will try a little more take a substantive look at the subject of our interest. Be that as it may, it was important to indicate the timeliness and necessity. The popularity and demand for crypto-assets in the world creates a demand for instruments, one of which we will talk about.

The desire of large players to introduce huge, by the standards of the crypto-sphere, money into the market led to a demand for tools that provide such an opportunity. A similar function in classical markets is performed by dark pools, also known as private exchanges, in which assets are traded through a hidden order book, thanks to software. According to various estimates, about 10-30% of the total trading volume on the classic markets of Europe and the USA comes from dark pools.

All this resulted in the creation of the Republic Protocol, which offers a decentralized exchange for exchanging Bitcoin, Ethereum and ERC20 tokens, providing the opportunity to use a dark pool. Advances in the fields of cryptography make it possible to protect the system and its participants within reasonable means confidential computing protocol and protection and motivation systems. The cross-chain exchange feature allows you to exchange assets from different blockchains through an atomic swap without the need for intermediaries. The project, having all this, combined with the absence of the risk of vulnerability or dishonesty of the exchange itself, gives an excellent chance to be in demand, first of all, from large players who want to enter the market or conduct large operations within it.

The Republic Protocol system is a decentralized exchanger with a hidden order book, executing orders without disclosing special details, where the REN token is used as a motivator and means of protecting the system.

How Republc Protocol works

The main technical goal of the protocol is to ensure the operation of network nodes in such a way that transactions on the exchange are processed and carried out without disclosing information about themselves. While this may seem impossible, cryptographic technologies developed over the past 30 years, if properly used and refined, offer similar possibilities.

Republic Protocol uses partition scheme secret Shamir for dividing orders into many fragments distributed throughout the network. The original order could not be recreated without collecting most of the fragments. To protect against malicious activity with these order shards, Republic Protocol uses an Ethereum smart contract called Registrar, which collects network nodes innetwork topology, which sets an unreasonably high price for an attacker to “collect” fragments, because one or more individual nodes, and even entire topologies, are nothing won't help.

Using fragments of two different orders, network nodes can cooperate with each other to jointly carry out calculations to find orders that satisfy each other. At the same time, no details about fragments of orders during these joint calculations are announced, to prevent the possibility of recreating the original order. To confirm calculations with such information content requirements, Zero-knowledge proof, a simple and efficient protocol provided by the Ethtereum smart contract called The Judge.

As soon as the network nodes have found orders that satisfy each other, an atomic swap is launched between traders in the peer-to-peer decentralized Republic Swarm Network. Thanks to asymmetric cryptographic primitives, the details of such a swap are also safe.

System properties

1. There is a system for identifying the personalities of Republic Dark Pool participants.
2. Traders do not need to be online at the moment when an order satisfies them will be found. Once a trade offer is placed, network nodes will search for a suitable counter offer until it is found, or until the order expires or is cancelled.
3. Order information is protected until it is executed. After this, some details of the operation will become known. This is an absolutely natural security limit, given that both parties know that their offer was satisfied, etc. at what point was this done? But, naturally, such information does not carry any advantages or threats.
4.  The overall liquidity of the Republic Dark Pool cannot be reliably assessed by any participant.

Assumptions< /h2>

The protocol is built on the following assumptions:

• There is a trusted third party that performs calculations honestly, etc. having limited computing power (for example, Ethereum)
• Participants are rational, and will not do anything without financial interest, etc. will strive in every possible way to increase their own benefit. Accordingly, participants are not expected to act honestly when they benefit from being dishonest.

Security Assumptions

Republic Protocol is based on the following assumptions:

1. An attacker cannot take over a trusted third-party network. In our case, it is assumed that there cannot be any hacking or other impact on the calculations carried out by a third-party network, such as Ethereum. A similar assumption is made by any smart contract or application created on Ethereum or another platform.
2. The attacker has limited financial and, accordingly, computational capabilities.
3. Computational tasks used in the creation cryptographic primitives are quite secure. This assumption is true for any blockchain, incl. Bitcoin and Ethereum, using any cryptography.

Security model

The ideal Republic Protocol contains a trusted, non-compromised third party, let's call it E. Traders submit their orders, receiving a guarantee of non-disclosure of order details. As soon as among such orders there are those that satisfy each other, both parties are notified and send their assets E. The latter makes the exchange and returns what he wants back. The deal is done.

The real Republic Protocol will be secure if and only if all attacks that apply to it will also apply to the ideal protocol.

Reasoning about this will help us understand the level of security provided by the protocol.

A real protocol is guaranteed to be secure, just like an ideal protocol, as long as the majority of network nodes are not captured by an attacker. Once 50% of the network nodes are captured, they can rebuild all orders. In the real world, be that as it may, Republic Protocol is sure that such a scenario is impossible. According to calculations, the details of which we will omit, but which are in the documentation, 50% of the captured nodes will allow only half of the orders to be reconstructed.

Decentralized exchange

As already mentioned, any demand or supply is divided into fragments, each of which does not contain representative information about the “parent” order. Only by collecting most of the fragments can the order be recreated. Each node looks for a match between its fragments and fragments of other orders of other nodes. Fragments are designed so that when a match is found, information about the “combination” of two matching fragments is visible, but does not provide any reference to the original orders.

In addition to this, the motivation in the network is structured so that it is not profitable for nodes to collude. Plus, there is good resistance against DDoS and expected errors due to the flexibility of the algorithm.

Also, the design of the order parts provides flexibility in calculations for searching for fragment matches. An interesting feature is the possibility of increasing liquidity through intermediary exchanges, for example, BTC-ETH, ETH-REN, REN-BTC, if there is not enough liquidity in a particular pair.

REN Token

In connection with the assumptions stated above, the computing nodes of the network should be interested in carrying out calculations to match orders.

For this mission, there is a REN token, which is used to pay for “motivation” for nodes in the form of a commission.

In addition to this, the token is used as a kind of collateral required by Registrar,  and allows traders and nodes to participate in the Dark Pool.

Let's take a closer look at this system.

Splitting an order into fragments is not enough for security, because an attacker can create many of his own nodes, increasing the chances of “catching” the fragments he needs. In addition, information can be pulled out through many “fake” orders, to discover the real ones.

To counter this kind Sybil attack a simple mechanism for identifying traders and nodes has been introduced, using collateral in the form of REN tokens. A trader’s larger deposit allows him to have more active orders, while preventing “fake” orders from being generated with impunity. For nodes, this deposit must be above a certain level required for registration and operation as a network node.

In case of discrepancy, fraud or collusion on the part of the trader or node, this collateral is written off. If you simply decide to leave, you will be reimbursed in full.

Protection against attacks

• To counter an attacker trying to determine orders in the system, the protocol is built in such a way that fragments of all orders are distributed over random network topologies, each node in which also random. In this case, any such set of nodes is given a maximum of 2 fragments. In fact, to be able to decrypt an order book, an attacker needs to take control of the entire network, which is not so easy.
• When a match of orders is found, both of them understand that there is some corresponding order (otherwise it would not be possible to find correspondence). Based on this, an attacker can use “fake” orders to obtain information about existing legitimate offers and liquidity in general. This is counteracted by the economic disadvantage of such an action, associated with the payment of a commission, etc. payment of collateral for the opportunity to place orders. Also, this kind of “suspicious” activity of the participant will be suppressed.
• The same system well counters the Sybil attack.

Work and plans

Currently At the moment, the project is implementing its technical ideas, updates are being made daily on github. The development map is also extremely rich. Roadmap

Q1 2018

• P2P overlay network (for network-wide communication)
• REN ERC20 contract
• Atomic Swapping contracts and scripts (support for BTC, ETH, ERC20, ERC721)
• P2P pooling network (for intra-pool communication)
• Registrar contracts (for registering nodes and traders)

Q2 2018: Private + Public Testnet

• Order booking contracts (for opening and closing orders)
• Secret sharing and computation< /li>
• Official nodes maintained by Republic
• Trader terminals (software allowing traders to open / expire orders and perform P2P atomic swapping)
• Verifiable secret sharing
< /ul>

Q3 2018: Mainnet

• Full specification for Republic Protocol
• Open-source reference implementation
• Package reference implementation for Ubuntu and Docker
• Partner nodes maintained by Republic partners
• REN powered DAO

Q4 2018 & Onwards

• Support for more chains including Litecoin
• Implementation of scaling solutions for atomic swaps including Lighting & Raiden.
• Support for High Frequency Trading
• Support for institutions

Conclusions

Republic Protocol provides decentralized dark pools, allowing traders to place various offers, executed in the presence of demand from the other party, without “voicing” the details. This is ensured by Shamir's secret sharing scheme and a specialized distributed network that performs calculations to find matches only in fragments of the original orders. Thus, orders are not visible to network nodes. Calculations are verified through Zero-knoledge proof. The motivational stimulator of the network will be the REN token, which provides competition for both traders, whose orders will be higher in priority depending on the commission, and nodes who want to process orders that are most profitable for themselves. Hostile nodes and traders are sought out and punished by deprivation of the deposit collected from all network participants. All this, if properly implemented, will give the project the opportunity to be an exclusive product that is in great demand inside and outside our crypto-sphere.

Information on ICO



The total number of REN tokens is 1 billion. At the ICO, the project collected 35,000 ETH, for 60.2% of its tokens. The ICO ended on February 3, the crowdsale gathered 4,075 participants who invested 5,000 ETH at a price of 1ETH=17,200 REN. Another 30,000 ETH were collected at the pre-sale with bonuses from 0 to 15%.

Release of REN tokens - February 17, 2018