By Rayna Ishihara | Crescent City Capital Market Analyst Intern
What is Loopring:
Loopring is a project that builds protocols, infrastructure, and user-facing products on the Ethereum blockchain.
Loopring’s protocol focuses on building non-custodial order book-based decentralized exchanges on Ethereum, by routing and processing trades and matching buyers and sellers at a market price without needing possession of their funds. This differs from centralized exchanges which require the traders to deposit funds with the exchange executing trades on the users’ behalf. The technology was founded in 2017 and has evolved to a multifaceted Ethereum effort.
On top of the protocol, the Loopring team is working on the Loopring Exchange which is the first publicly accessible zkRollup exchange built on Ethereum as well as the Loopring Wallet which is a self-custodial user friendly mobile wallet. The purpose of Loopring is to ultimately make trading assets and making payments on Ethereum faster and cheaper without sacrificing security and the Loopring can currently process 2,025 trades/transactions per second at peak which is 1,000x what Ethereum can do on its own.
Loopring is the first zkRollup protocol on Ethereum, which brings into a completely new Tech in the field of blockchain called “zkRollup layer2.” The company believes that the future of finance is built on Ethereum, especially layer2( zkRollups).
zkRollups layer2 is known as Zero-knowledge roll ups which is a technology in the Ethereum blockchain that moves computation and state off-chain into off-chain networks while storing transaction data on-chain on a layer-1 network. They are used to increase transaction throughput and reduce transaction costs while inheriting the security of the base layer network that they are connected to since they only periodically post valid batches of transactions.
The Loopring team also claims that they use the most secure scaling mechanism in the industry. Since Loopring does not rely on any external validators, there is no third party that can come
between the users and Ethereum-based assets, so users of Loopring App do not need to worry about the trade off between speed and security.
Loopring Token (LRC)
The Loopring token (LRC) is the native trading token for the Loopring ecosystem. The LRC token is linked to the network’s primarily power, the decentralized exchange. Everyone the DEX is used, LRC is paid and 80% of the money goes to liquidity providers while the remaining is split between insurers and Loopring’s DAO. LCR holders can also participate in Loopring’s VIP program and liquidity mining and it is an ERC-20 that can be acquired through Loopring exchange or all major DEXes and centralized exchanges. LRC is highly volatile and boomed at the end of October 2021 when GameStop used Loopring to create a marketplace for NFT trading. Analysts believe LRC’s price is pegged to the success of Ethereum and Vitalik Buterin thinks that the two advancements will complement each other.
Loopring is a decentralized product and trading protocol that enables users to trade cryptocurrencies without relying on a centralized exchange or giving up control of their private keys. One of the key issues about blockchain is the proof-of-stake consensus mechanism resulting in high transaction fees and congestion which Loopring aims to solve. The technology is powered on Layer 2 blockchains which allows it to make the experience of using Ethereum faster with developers claiming the protocol reached a throughput of approximately 1,000 times greater than Ethereum and peaks at 2,025 transactions a second with transaction fees costing less than a cent. Loopring accomplishes its features using zkRollups and ultimately works on designing and engineering the best-in-class zkRollup exchange and payment protocol on Ethereum.
https://coinmarketcap.com/currencies/loopring/ https://blog.chain.link/zero-knowledge-rollup/#what_are_zk-rollups_ https://decrypt.co/resources/what-is-loopring-ethereum-tool-decentralized-exchange-payments https://www.coindesk.com/learn/what-is-loopring-and-whats-driving-its-rise/ https://loopring.org/#/about