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Railgun was built on the Ethereum blockchain to add privacy and anonymity to the transactions of ERC-20 tokens.
Railgun is a relatively young project, with the whitepaper having only been released in July 2021. The Railgun Privacy System is an on-chain service on Ethereum that allows for anonymous interactions with DEXs, lending platforms, and other DeFi protocols on Ethereum and other smart contract-capable blockchains. The protocol has deployed on Binance Smart Chain and Polygon, with Solana and Polkadot scheduled to for testnet deployments later this year.
What began as a privacy protocol for Ethereum has rapidly expanded into almost every area of DeFi, with many more blockchains in the project’s sights for future deployments. Railgun enables the ability to privately and anonymously interact with DeFi protocols, which includes sending transactions, yield farming, lending crypto, hosting NFT auctions, and proving membership of DAOs without revealing your stake.
What’s Ahead for Railgun?
Railgun was built on the Ethereum blockchain to add privacy and anonymity to the transactions of ERC-20 tokens. Ethereum is the second-largest cryptocurrency by market cap after Bitcoin and boasts the largest number of dApps of any blockchain ecosystem. This gave Railgun an excellent starting point for launch. Once digital assets are added to the Railgun system, they are shielded and no identifying information links subsequent transactions to the original tokens.
Railgun has been able to expand on the Ethereum blockchain and demonstrate its interoperability with other blockchains. This is possible in part through its partnership with REN. The Railgun project creators understand that it is not just Ethereum projects that are seeking to add financial privacy and anonymity protocols.
Ren is an open protocol built to provide interoperability and liquidity between different blockchains. It is this relationship with Ren that helps drive the versatile integration of non-native tokens on the blockchains Railgun operates on.
How REN Works
Users deposit their crypto onto the REN protocol which then uses the RENVM to create a wrapped version of the deposited coin or token. These new wrapped tokens are then compatible with the blockchains the users seek to interact with.
An easy example to consider would be if someone wanted to use their BTC to interact with one of the DeFi projects on the Ethereum network. Currently, Bitcoin and the Ethereum blockchain are not compatible. The user can deposit their BTC into the REN protocol which would then mint a new token on Ethereum called renBTC. Users could then use this newly minted renBTC on any project that accepts it on the Ethereum blockchain. This indirectly allows users to use their BTC in a wrapped nature on Ethereum and opens the door to untapped sources of liquidity for DeFi projects.
Railway is a third-party app that interacts with the Railgun Privacy System. It builds on the partnership with REN by creating a simple app for interoperability that has an optimized GUI for browsers and mobile devices. The Ren integration will create simple direct routes that will immediately mint wrapped assets that are compatible with the Railgun system. This lowers the barrier to entry and makes the whole Railgun Privacy System more accessible to all users.