What Are Darknodes ?

RenVM operates as a cross-blockchain liquidity network, consisting of numerous decentralized nodes known as darknodes. Anyone can host a darknode, but certain criteria must be met, including:

1. Operating the RenVM software on a virtual private server.

2. Committing an investment of 100,000 REN tokens to the darknode registry contract.

These requirements incentivize darknode operators to uphold network integrity by putting their deposits at risk.

Darknodes serve as trustless, decentralized custodians for digital assets held on the RenVM platform. When RenVM transforms a digital asset into an ERC-20 token, users have the opportunity to earn fees. In peer-to-peer networks, nodes are pivotal for establishing protocol security and facilitating network operations. The decentralized dark pool within the Republic Protocol relies on darknodes to perform this crucial function, which is less computationally intensive than Bitcoin mining.

The primary role of darknodes is to match orders from the Republic Protocol's distributed hidden orderbook. They collaborate to efficiently validate and reconstruct the private data of matched orders before sending them to the relevant dark pool's settlement layer. These pools typically require at least one third-party-defined settlement layer. Darknodes are rewarded for initiating settlements, with the first one to acquire a sufficient quantity of matching order components and commence settlement receiving the reward. Order shares are evenly distributed throughout the network, and transaction settlement fees can be received in various currencies, including ETH and other tokens.

The REN token is frequently used to fuel the sMPC network, which operates through Darknodes (RenVM). While the Darknode network is permissionless, a mandatory bond of 100,000 REN tokens prevents malicious actors from registering and flooding the network with excessive and harmful Darknodes, ensuring network security and reliability.