Interoperability has become one of the driving themes within the crypto market and as the blockchain ecosystem evolves into an interconnected web of layer-one protocols, the importance of communication and efficiency among decentralized applications (dApps) will also increase.
Ren (REN), a blockchain protocol designed to provide interoperability and liquidity between different blockchain platforms, has started gaining traction over the past month and a half as activity in the decentralized finance (DeFi) sector has been on the rise.
Data from Cointelegraph Markets Pro and TradingView shows that after reaching a low of $00.41 on Aug. 9, the price of REN has climbed 185% to a daily high at $1.16 on Sept. 15 as its 24-hour trading volume spiked 443% to $673 million.
Three reasons for the price growth seen in REN include the steadily increasing activity and total value locked on RenVM, the launch of a bridge to Arbitrum and the release of RenVM Greycore on the network’s testnet.
Rising volume and total value locked
REN’s bullish momentum can be found in the data for the total network volume and total value locked (TVL).
As 2021 progressed, new chains were added to the list of bridges supported, which now includes Ethereum, Binance Smart Chain, Solana, Polygon, Fantom, Avalanche and Arbitrum.
Each new bridge has helped to increase the volume and TVL on the Ren network, which has coincided with moves seen in REN p.
REN price follows the Bridge to Arbitrum
The spike in price seen on Sept. 15 was due, in large part, to the release of the Arbitrum bridge, an Ethereum (ETH) layer-two scaling solution Arbitrum, which is designed to host popular decentralized applications in a fast, low-fee environment.
The Ethereum network has been plagued by high fees and delayed transaction times, which have hampered the ability of many users to use DeFi or nonfungible token (NFT) related protocols on the network.
Arbitrum’s low-cost environment has proven to be an attractive DeFi environment for BTC holders who are now able to migrate to the layer-two solution and interact on the network with renBTC.
The total value locked on Arbitrum via the Ren protocol was $7.75 million as of Sept. 15 and is represented by the green line in the value locked chart above.
REN marches toward decentralization
A third reason behind the increase in activity for REN was the release of RenVM Greycore on the network’s testnet on Sept. 13, a move that was done as the project works toward its goal of full decentralization.
Greycore is a semi-decentralized validator set of nodes that are operated by reputable DeFi projects and it helps to add an additional layer of protection for the protocol.
The first project to join Greycore was BadgerDAO, a DeFi project focused on building projects that bring BTC to DeFi.
According to data from Cointelegraph Markets Pro, market conditions for REN have been favorable for some time.
The VORTECS™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.
As seen on the chart above, the VORTECS™ Score for REN turned green on Sept. 13 and climbed to a high of 71 on Sept. 14 just as the price of REN began to increase 72% over the next two days.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Ray Schuetz received a Masters Degree in computer science from The University of Texas (Austin). Ray has been working as a full-time blockchain consultant for the past 3 years. In his spare time, Ray enjoys writing for EthereumCryptocurrency.com and other crypto news publications.