Darknode
In short: A darknode is one of the computers in the decentralized network that runs RenVM, the system built by the Ren project to move assets between blockchains.
A darknode is one of the computers in the decentralized network that runs RenVM, the system built by the Ren project to move assets between blockchains. Darknodes offer their computing power and storage to anyone who meets certain conditions and provides the appropriate compensation in the form of network fees.
Why it matters
An asset such as bitcoin cannot be used directly in Ethereum applications, so it has to be locked on its own chain and represented by a token on the other. In RenVM's design, the locked funds are controlled jointly by darknodes using secure multiparty computation, so no single darknode ever holds a complete private key. To run a darknode, an operator must bond a set amount of REN tokens, which gives the operator something to lose by misbehaving, and in return the node earns a share of the fees users pay. This shared-custody model is an alternative to bridges where a single company holds the locked coins.
Example
A user wants to use bitcoin in an Ethereum lending app. They send BTC to a deposit address controlled by the darknodes. Once the deposit is confirmed, the darknodes jointly approve the minting of an equal amount of a BTC-backed token on Ethereum, called renBTC. Later, burning that token instructs the darknodes to release the original BTC on the Bitcoin network, minus fees.