Loopring is an Ethereum tool for decentralized exchanges and payments. Founded in 2017 by former Google software engineer Daniel Wang, the protocol seeks to make trading assets and transacting payments on Ethereum faster and cheaper, without sacrificing security.
More specifically, Loopring is a protocol for building non-custodial, orderbook-based decentralized exchanges (DEX) on Ethereum. It routes and processes trades, matching sellers and buyers at a market price without ever requiring possession of the buyers’ or sellers’ funds.
The Down Low: Loopring makes Ethereum faster, less expensive and more secure.
What is Loopring (LRC)?
The Loopring protocol uses something called “ring-matching.” This means that when you want to buy or sell an asset, your order is matched with someone else’s order going in the opposite direction. For example, if you want to sell ETH for LRC, and there’s someone else who wants to buy ETH for LRC, the exchange will match those orders and execute the trade automatically.
One key advantage of this system is that it doesn’t require a centralized exchange to hold your assets. Instead, Loopring uses Ethereum smart contracts to hold users’ assets in escrow. This makes Loopring more secure than traditional exchanges, which have been hacked in the past. (See: Mt. Gox, Coincheck.)
Another advantage is that the platform is designed to be scalable. The Loopring team uses something called “zkRollups,” which allows them to process thousands of transactions per second without sacrificing security or decentralization.
Loopring’s native token is LRC. LRC holders are eligible for Loopring’s VIP program and liquidity mining, as well as participation in the governance of the company.
LRC is an ERC-20 token that can be purchased on the Loopring Exchange as well as on all major DEXs and centralized exchanges such as Binance, OKX, ByBit, and Bittet.
The LRC token was launched in June 2021. Although its price has dropped since its all-time high in December, LRC looks like it has upside potential. LRC coin has a current supply of 1,330,082,009 coins and a total maximum supply of 1,374,513,896.
Loopring creates protocols, infrastructure, and user-facing products for the future of finance. They believe that this future will be built on Ethereum, specifically layer 2. (zkRollups).
Thanks to Looping decentralized finance (DeFi) users do not have to choose between security and performance. Loopring’s L2 platform offers a low-fee, high-speed platform for trading, swapping, liquidity provisioning, and payments – all while maintaining Ethereum security.
The company envisions a digital economy in which users are empowered and have complete control over their assets. The protocol has demonstrated that non-custodial technology can match custodial alternatives in terms of speed, cost, and experience. The goal is to make decentralized exchanges (DEXs) as efficient as centralized exchanges and while competing with incumbent fintech.
The aim of the company is to create and operate products that bring the best-in-class zkRollup exchange and payment protocol on Ethereum to users all over the world.
How to Use Loopring
In order to use the platform, you first need to deposit your tokens into the Loopring smart contract. Once your tokens are deposited, you can create “orders” that specify the token you want to buy or sell, the amount, and the price.
These orders are then matched with other orders in the Loopring network, and the trade is executed on-chain. Finally, your tokens are settled off-chain, meaning they’re transferred to the other party in the trade without ever leaving the Loopring smart contract.
If you’re interested in trying out Loopring, you can use the Loopring Exchange or the Loopring Wallet. The former is a decentralized exchange built on the Loopring protocol, while the latter is a non-custodial wallet that supports Ethereum and ERC20 tokens.
What if you don’t use the Loopring protocol to power your exchange? You can still use it for payment – as a fast, gas-free lane for users to deposit and withdraw Ethereum-based assets. The protocol typically enhances the user experience while drastically lowering network (gas) costs-a major complaint about Ethereum.
What makes Loopring different?
The platform also supports decentralized payments, which is a key area of focus for the Loopring Foundation. The Loopring Protocol can be used to pay for goods and services with any ERC20 token, without the need for a centralized payment processor. This is made possible by the use of smart contracts on the Ethereum blockchain.
The Loopring Protocol has been audited by several independent security firms, and it has been proven to be secure and resilient. In addition, the protocol has been battle-tested on Ethereum’s mainnet since early 2018.
Given these advantages, it’s no wonder that is one of the most popular protocols in the DeFi space. If you’re looking to trade or make payments with digital assets, Loopring is a platform worth considering.
The protocol could potentially revolutionize the way we trade digital assets and make payments on Ethereum. By making these processes faster and cheaper, while still maintaining a high level of security, Loopring has the potential to become the go-to protocol for decentralized exchanges and payments on Ethereum.
Loopring is an interesting project because it’s trying to solve some of the biggest problems with Ethereum: high transaction costs and slow speeds. If they’re successful, the protocol could become a major player in the DeFi space.
We are definitely going to be keeping an eye on this project. What about you? Are you interested in this project? Let us know in the comments!
As always, do your own research before investing in any cryptocurrency. Full transparency; the author holds LRC in his portfolio.
Jay Speakman is a technology writer based in San Francisco, California. He writes on the topics of blockchain, cryptocurrency, DeFi and other disruptive technologies. Clients include Avalanche, Be[in]Crypto, Trust Machines and several blogs devoted to blockchain gaming. He will not rest until fiat currency is defeated.