What is Loopring (LRC) and What to Expect

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In the world of decentralized finance (DeFi), Loopring (LRC) is making waves with its innovative ideas. By creating decentralized exchanges on the Ethereum blockchain and using clever security methods, Loopring is changing how we handle digital money. Let's explore what is loopring crypto, what makes Loopring special and how it's shaping the future of blockchain technology.

Key Takeaways

1. Loopring is an open protocol for building decentralized exchanges (DEXs) on the Ethereum blockchain.
2. It uses zero-knowledge proofs, otherwise known as ZK-rollups, to create faster and cheaper fees while maintaining security.
3. Loopring (LRC) is a token that powers the Loopring protocol, a layer 2 Ethereum solution that enables fast and scalable decentralized applications (DApps) on top of the most famous smart contract network.

What is Loopring (LRC)?

To answer the question of what is LRC - Loopring is an open protocol for building decentralized exchanges (DEXs) on the Ethereum blockchain. It was founded by Daniel Wang, a software engineer based in Shanghai, China. The protocol uses zero-knowledge proofs, otherwise known as ZK-rollups, to create faster and cheaper fees while maintaining security. This makes Loopring unique in the realm of decentralized finance (DeFi) protocols.

Loopring (LRC) is a token that powers the Loopring protocol, a layer 2 Ethereum solution that enables fast and scalable decentralized applications (DApps) on top of the most famous smart contract network. Some of its distinctive features include:

1. A blockchain agnostic system: Loopring allows any platform that has implemented smart contracts, such as Ethereum and NEO, to integrate with its system. This gives Loopring more flexibility and interoperability.
2. NEO and Ethereum integration: Loopring has already integrated with two of the most popular smart contract platforms, NEO and Ethereum. This means that users can trade tokens across these two blockchains using Loopring’s protocol.
3. Flexible operation: Loopring allows users to choose between different types of order matching and settlement methods, such as automated market makers (AMMs) or order books. This gives users more options and control over their trading experience.
4. Full control (for the traders): Loopring does not require users to deposit their tokens or assets into a centralized exchange or custodian. Users can keep their funds in their own wallets and trade directly from there. This ensures that users have full ownership and access to their funds at all times.
5. Solution to scalability issue: Loopring uses ZK-rollups to batch and compress thousands of transactions into a single proof that is verified on the Ethereum blockchain. This reduces the gas fees and congestion on the network, while increasing the throughput and speed of the transactions.
6. Easy mechanism: Loopring has a simple and user-friendly interface that allows users to easily connect their wallets and start trading. Loopring also provides a wallet app that supports multiple currencies and DApps.

Loopring (LRC) price, supply and Market cap

Loopring - how does it work

So, what does loopring do and how does it work? Loopring is a decentralized protocol that uses zero-knowledge proofs, otherwise known as ZK-rollups, to create faster and cheaper fees while maintaining security. It operates on a decentralized network where multiple nodes work together to facilitate trades. This contrasts with centralized exchanges, which are governed by a single entity.

Here are the key components of how Loopring operates:

Loopring’s ZK rollup

One important aspect to mention when talking about how loopring crypto works is a zk-Rollup - a Layer-2 function that integrates with the Ethereum network to improve scalability. A zk-Rollup can bundle hundreds of transactions together and transform them into a single data-light Zero-Knowledge Proof that is then confirmed in a batch on the Ethereum network. Loopring was one of the first-ever ZK rollups and can theoretically operate at 1000x the speed of Ethereum, supporting over 2000 transactions per second.

PoW

Loopring relies on a proof-of-work (PoW) algorithm to verify and generate new blocks on the network.The proof-of-work system/protocol was first used in the mid-1990’s for fighting spam emails. The idea never found a truly useful cause until 2009 when bitcoin was created. This system is used by cryptocurrencies like Bitcoin.

PoS

Staking is typically used to secure and validate transactions on a proof-of-stake (PoS) blockchain, which is an alternative to the proof-of-work (PoW) consensus mechanism used by cryptocurrencies like Bitcoin. By staking their tokens, individuals contribute to the security and stability of the blockchain network and earn passive income in the form of staking rewards, which are distributed in proportion to the amount of tokens staked.

As such, Loopring combines the benefits of both PoW and PoS mechanisms to ensure security and efficiency in its operations. It leverages the power of ZK-rollups to enhance scalability and speed, making it a unique player in the realm of decentralized finance.

Blockchain Loopring (LRC) operates on

Loopring currently operates on the Ethereum blockchain alongside hundreds of other projects based on Ethereum as it is relatively easy for software developers to create their own works on Ethereum. However, Loopring is not limited to Ethereum and can be deployed on any smart contract platform that supports EVM-compatible smart contracts.

The Loopring blockchain architecture consists of three main components:

1. Loopring Protocol: This is the core layer of Loopring that defines the rules and standards for decentralized exchange operations. It consists of a set of smart contracts that handle the logic of order matching, ring verification, fee distribution, and token staking.
2. Loopring Relay: This is the off-chain layer of Loopring that facilitates order sharing and ring mining. It consists of a network of nodes that communicate with each other and with the Loopring Protocol. The nodes are responsible for broadcasting orders, finding order rings, and submitting them to the smart contracts.
3. Loopring Wallet: This is the user interface layer of Loopring that allows users to interact with the Loopring Protocol and the Loopring Relay. It consists of a web-based or mobile-based application that enables users to manage their funds, place orders, and trade on Loopring DEXs.

How To Use Loopring (LRC)

To use Loopring, you first need to move your funds onto Loopring by sending them to a smart contract managed by the Loopring protocol. From there, Loopring exchanges move the computation necessary to complete trades off of the main Ethereum blockchain. This includes information such as a user’s account balances and order histories. This allows for faster and cheaper transactions on Ethereum.

You can use Loopring in two ways:

1. Order book trading: You can place limit orders or market orders on a Loopring DEX that uses an order book model. Your orders will be matched with other orders in a circular trade, called an order ring. The order ring will be verified by the smart contracts and settled on the Ethereum blockchain using zkRollups.
2. AMM trading: You can swap tokens on a Loopring DEX that uses an automated market maker (AMM) model. You can provide liquidity to an AMM pool and earn fees from other traders. You can also withdraw your liquidity at any time. The AMM trades will also be settled on the Ethereum blockchain using zkRollups.

What Makes Loopring Unique?

The main idea behind Loopring is to combine elements of centralized and decentralized cryptocurrency exchanges to create a protocol that will enjoy their unique advantages and eliminate inefficiencies. The Loopring Protocol uses zero-knowledge proofs to achieve its high throughput and cheap fees.

Loopring (LRC) is unique for several reasons:

1. Layer 2 Solution: Loopring is a Layer 2 solution for the Ethereum network. This means it operates on top of the Ethereum blockchain, providing scalability and efficiency improvements.
2. ZkRollups: Loopring uses a technology called zkRollups. This allows it to bundle multiple transactions into a single proof, which can be verified on the Ethereum network. This results in faster transaction times and lower costs.
3. Non-Custodial Technology: Unlike centralized exchanges, Loopring is non-custodial. This means users retain control of their funds at all times, improving security.
4. Hybrid Ecosystem: Loopring aims to combine the benefits of centralized and decentralized exchanges. It facilitates centralized order-matching with decentralized on-chain order settlement.
5. Avoids High Gas Fees: Through its payment method, Loopring enables all Ethereum users to transact without having to pay high gas fees.

These features make Loopring a unique player in the realm of decentralized finance. It offers a secure and efficient platform for trading digital assets while maintaining user control and privacy.

Who created Loopring?

Loopring was founded in 2017 by Daniel Wang, who previously worked at Google and has a strong background in blockchain technology. The project held an ICO in August 2017, raising $45 million, although nobody really knows where is Loopring based.

1. Daniel Wang is a software engineer who previously worked at Google. He has a strong background in blockchain technology and has been instrumental in the development and success of the Loopring protocol. In 2022, he stepped down as CEO and was replaced by Steve Guo, but continues to work as an adviser and focuses on developing Loopring’s layer 2 strategy.
2. Steve Guo, the current CEO, was previously the Chief Technology Officer at Loopring. He has a strong background in software engineering and was a tech lead at Intel. He was admitted to the University of Science and Technology of China when he was 15 years old and graduated with a Ph.D. in computer science in 2005.

Jay Zhou and Johnston Chen are also key figures in the founding and development of Loopring1, but there is less publicly available information about their roles and backgrounds.

History of Loopring

Loopring was founded in 2017 by software engineer Daniel Wang. The project was launched with the aim of reducing the need for centralized exchanges and granting traders access to global crypto liquidity. Loopring conducted an initial coin offering (ICO) in August 2017 and raised $45 million worth of Ethereum (ETH).

Expansion

After its successful ICO, Loopring focused on developing its protocol. The development team had plans to extend the Loopring functionalities on top of NEO and QTUM networks. However, the Loopring team announced that they are not focusing on NEO deployment and QTUM deployment has stopped.

Updates

Loopring has been updated five times, and the latest version is Loopring 3.8. The protocol released its own decentralized exchange, which uses both AMM and order-book models, in February 2020.

The major stakeholders of Loopring

The major stakeholders of Loopring are the Loopring Foundation, a non-profit organization operating from Shanghai, which is responsible for developing the project. The foundation is committed to the continuous development and improvement of the Loopring protocol.

How Is Loopring (LRC) Different To

Bitcoin (BTC)

Bitcoin, the first blockchain-based cryptocurrency, is a digital currency that was created by an unknown person or group of people using the name Satoshi Nakamoto. It operates on a peer-to-peer network and transactions take place directly between users without an intermediary. Bitcoin doesn’t support smart contracts and its primary purpose is to be used as a digital currency. Bitcoin uses the Proof-of-Work (PoW) consensus mechanism.

Ethereum (ETH)

Ethereum, on the other hand, is a blockchain platform that supports smart contracts. It was proposed in late 2013 by Vitalik Buterin, a cryptocurrency researcher and programmer. Ethereum’s primary use is to build decentralized applications (dApps) that run on blockchain technology. Unlike Bitcoin, Ethereum operates using accounts and balances in a manner called state transitions. Ethereum uses the Proof-of-Stake (PoS) consensus mechanism.

Litecoin (LTC)

Litecoin, often considered as silver to Bitcoin’s gold, is a peer-to-peer cryptocurrency that was created by Charlie Lee, a former Google engineer. Like Bitcoin, Litecoin is a digital currency without smart contract functionality3. It was one of the first forks of the Bitcoin Core client. It differs from Bitcoin in aspects like faster block generation rate and use of scrypt as a proof of work scheme.

Loopring differs from these as it’s not just a cryptocurrency but also a protocol for building decentralized exchanges.

Advantages of Loopring 

Loopring offers several advantages that contribute to its appeal among users and investors. These include:

1. Security: Loopring ensures that users maintain complete control over their funds throughout the entire trading process, enhancing the overall security of transactions.
2. Cross-chain protocol: Loopring's ability to support trading across different blockchains facilitates greater flexibility and accessibility for users, enabling seamless transactions across various platforms.
3. High liquidity: The ring-matching feature employed by Loopring enables the platform to handle multiple tokens simultaneously, ensuring high liquidity and efficient trade execution.

Disadvantages of Loopring

While Loopring boasts several advantages, there are certain considerations to bear in mind, including:

1. Complexity: The concept of decentralized exchanges may pose challenges for some users who may find the system intricate and difficult to grasp initially.
2. Smart contract risk: Although Loopring's smart contracts are designed with security measures, they still carry inherent risks associated with potential bugs or vulnerabilities that could impact transaction processes.

Is Loopring Safe?  

To answer the question “is Loopring safe” - Loopring’s network is built on a secure infrastructure designed to protect users from various forms of fraud and malicious attacks. It uses a type of cryptography called Zero-Knowledge Proofs, which allows it to process transactions privately. These proofs are important for maintaining encryption in the blockchain as they don’t reveal excess information about a transaction. Therefore, Loopring is considered to be a safe and reliable platform for exchanging digital assetsLoopring’s network is built on a secure infrastructure designed to protect users from various forms of fraud and malicious attacks. It uses a type of cryptography called Zero-Knowledge Proofs, which allows it to process transactions privately. These proofs are important for maintaining encryption in the blockchain as they don’t reveal excess information about a transaction. Therefore, Loopring is considered to be a safe and reliable platform for exchanging digital assets.

Buying Looping (LRC)

Wondering is Loopring worth buying? If you want to become an owner of the Loopring cryptocurrency- head to SimpleSwap and follow these instructions:

1. For example, you want to swap BTC for LRC. Select the currency you want to exchange (e.g. BTC) in the first drop-down list. Then enter the amount you want to swap.
2. Select LRC in the second drop-down list. You’ll see the estimated amount that you’ll get after the exchange.
3. Click the Exchange button.
4. Enter the Recipient's Address. LRC will be sent. Be careful and make sure you use the correct address.
5. Create the exchange.
6. You will see the Bitcoin deposit address. You need to transfer the necessary amount of BTC to this address to start the BTC to LRC exchange.

How to Stake Looping (LRC)

Staking is a process where you lock up your tokens in a cryptocurrency network to contribute to the network’s security and operations. Here are the steps to stake Loopring (LRC) tokens:

1. Go to the Loopring Contract and connect your wallet.
2. Approve the Loopring Staking contract address.
3. Go to the Loopring Staking Smart Contract and connect your wallet.
4. Click ‘STAKE’ and enter the amount of tokens you want to stake.
5. Click ‘STAKE’ again and approve the transaction in your wallet

That's it, you have now learnt how to stake Loopring.

Mining Loopring (LRC)  

Loopring does not support traditional mining like Bitcoin or Ethereum. Instead, it uses a process called “ring mining” where orders are matched in a circular trade, called an order ring. This process improves the liquidity of the Loopring network. In this process, orders are matched in a circular trade, known as an order ring. This method is designed to improve the liquidity of the Loopring network. It’s important to note that this doesn’t involve the creation of new tokens, but rather facilitates the exchange of existing ones.

Roadmap

After we’ve learned about what is LRC, it’s safe to say that Loopring has been continuously developing its protocol with a focus on building infrastructure for secure, non-custodial exchange of crypto assets. However, there isn’t a specific future roadmap available publicly. The team has been releasing updates and improvements as they continue to develop the protocol.

Here are some of the recent developments and future plans that have been reported:

1. NFT Marketplace Launch: Loopring has hinted at a possible launch of an NFT marketplace. This could potentially open up new avenues for digital artists and collectors, and increase the use cases for the Loopring protocol.
2. GameStop Partnership: there are rumors that Loopring is partnering with GameStop. While this has not been officially confirmed, such a partnership could potentially lead to new developments in the gaming and blockchain space.
3. Loopring DAO and Insurance Fund: Loopring plans to launch the Loopring insurance fund and DAO (Decentralized Autonomous Organization). This could potentially involve the community more in the project’s decision-making process.
4. Continued Development of zkRollup Technology: Loopring has been working on improving its zkRollup technology for scaling up transactions, making them faster and cheaper. This is a key part of Loopring’s infrastructure and will likely continue to be a focus in the future.

Please note that these are plans and developments that have been reported, and actual future developments can vary. It’s always a good idea to follow Loopring’s official channels for the most accurate and up-to-date information.

Future of Loopring

The future of Loopring looks promising as it continues to build out its protocol for decentralized exchanges. Some predictions suggest that the price of Loopring (LRC) could reach up to $4.95 by 2030 and even surpass $10 by 2030 according to other analyses. However, these are just predictions and actual future performance can vary. It’s also worth noting that the future of Loopring is not solely dependent on its price but also on its technological advancements and adoption in the market.

The Bottom Line

Loopring offers a unique solution in the world of decentralized finance by combining the benefits of both centralized exchanges and decentralized exchanges. Its use of Zero-Knowledge Proofs and ring mining makes it stand out among other cryptocurrencies. However, like all investments, it’s important to do your own research and understand what you’re investing in before you decide to invest in Loopring or any other cryptocurrency.

FAQ

Find out more about LRC from this section.

How Many Loopring coins are there in circulation?

There are currently 1,331,672,349 LRC coins in circulation

Is Loopring an erc20 token?

Yes, Loopring (LRC) is an ERC20 token for the Loopring open protocol

Who is the owner of Loopring?

Loopring Technology Limited (LTL) is the owner and operator of Loopring Exchange

Is Loopring safe and legit?

Yes, Loopring is considered safe and legit. It uses a protocol that operates on top of an existing system, offering high levels of security in a completely decentralized format. It also has positive reviews from various sources.

What is Loopring crypto used for?

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. It also seeks to offer rewards to all participants of the ecosystem to perpetuate the decentralized and non-custodial exchange.