Loopring is gaining popularity day by day in the crypto world. If you’re unaware of the Loopring, this article is just for you.
Let’s dive into the topic right away.
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What is Loopring (LRC)?
LRC is an Ethereum-based digital currency of Loopring. LRC is the open protocol that is specially designed for creating decentralizing cryptocurrency exchanges.
Keeping it simple, Loopring is the software that runs on the Ethereum blockchain, the ultimate aim of Loopring is to incentivize the global users to operate the platform that will allow the designing or creation of new crypto-asset exchanges. Loopring will use several digital currencies, including its native token i.e LRC, to together offer for Loopring platform.
Most prominently, Loopring (LRC) declares its platform will provide exchanges that are associated with slow speed and expensive on the Ethereum network through the usage of zkRollups (zero-knowledge rollups). With zero-knowledge rollups, Loopring claims its exchange platform can offer a better settlement for all the traders. Simply put, zkRollups will allow Loopring exchanges in order to complete their key computation anywhere in the world.
The primary idea behind the invention of Loopring is to reduce the transaction volume that a Loopring (LRC) exchange needed to submit to ETH (Ethereum) network. Ultimately, Loopring will increase the speed of transactions and also decrease the costs for every trader.
Who founded Loopring (LRC)?
Loopring was introduced by Daniel Wang. Daniel is a well-known software engineer who worked at JD.com and Google. In 2017, Loopring (LRC) has conducted its initial token offering, raising around 12,000 in terms of Ethereum (ETHER) worth 45 million dollars.
However, the maximum amount of funds that are raised are returned to ICO members because of the tightening of regulations and laws in China. The remaining fund was further used for protocol development for Loopring Foundation.
In 2019, the Loopring 2.0 protocol has transitioned to Loopring 2.0. It means Loopring 3.0 offers 1000x improvement in terms of efficiency. Plus, Loopring has partnered with Chainlink. After many strugglings, Loopring has released its own decentralized platform in Feb 2020. The latest version is based on AMM trading, order book and also works as a payment application.
What makes Loopring (LRC) unique?
The primary benefit of Loopring is it combines the benefits of centralized and decentralized crypto exchanges. Yes, you’ve heard it right. As mentioned earlier, Loopring uses zkRollups, the will achieve better throughput and cost-effectiveness when compared to other remaining exchanges that are built on Ethereum (ETH) blockchain.
The non-custodial technique is another uniqueness of Loopring, it presents a top-level improvement to the safety and security of exchanges. Loopring offers high-level performance, traders can use higher-frequency trading techniques on decentralized exchanges. Loopring operates a cryptographic solution, this will prevent front-running.
Loopring protocol is open-source. The user doesn’t depend on anyone. It means no company, government or external validation is necessary. Users will have complete control over their cryptocurrencies. Furthermore, they can receive digital receipts on every withdrawal and deposit automatically. It means, all the funds will be recovered instantly even when the DEX encounters any sort of issue.
How many Loopring (LRC) coins are there in circulation?
There are 1,245,991,469 Loopring coins are in circulation. The maximum supply of Loopring (LRC) coins are 1,374,513,896. More than 20 million Loopring tools have already been burned initially.
10% of every trading fee will be given to Loopring DAO. There are several options included such as grants, liquidity incentives, impremanent loss-protection and buy-back Loopring to burn.
How does Loopring (LRC) work?
If you’re unaware of the Loopring working model, have a look below. Basically, the Loopring working model is based on two concepts i.e
- zkRollups
- Order rings
zkRoolups
Loopring is offering better performance compared to traditional DEX’s (decentralized exchanges). But how? The answer is simple, Loopring create a “fast lane”, every transaction is aggregated and later executed off-chain. As a result, user’s can avoid Ethereum (ETH) congestion on the network. The process is done using zkRollups, also called as “Layer-2 scaling solution”. Simply put, a bunch of transactions are submitted off-chain before processing to the ETH blockchain. Thousands of transactions are grouped together and submitted as a single transaction on the Ethereum blockchain.
Zk stands for zero-knowledge in zkRollups. With zkRoolups, the total number of transactions LRC that are submitted to the blockchain is greatly reduced. This method is making the trades cheaper and faster on Loopring (LRC). zkRoolups approach is efficient and doesn’t strain more on the Ethereum network. Zero-knowledge shows the answer to the calculation doesn’t reveal the equations which are used in it.
Order rings
There are several decentralized exchanges available in the market. On the DEX’s an order to purchase a particular coin in the trading pair need to be matched or paired with another order to sell that cryptocoin within similar trading pair. Loopring (LRC) works in an excellent method, LRC will mix and match several orders in the circular trading system. This system is called an “Order ring”. Every order ring will have around 16 orders, every order will create a loop. On the loop, every order will exchange necessary crypto coins. Order ring method will improve liquidity and value.
Loopring (LRC) 3.0
Let’s discuss a few things about Loopring (LRC) 3.0. As mentioned earlier, Loopring 3.0 is the new iteration of the LRC protocol.it offers better performance, users don’t need to worry about the tradeoff in security. The ultimate goal of Loopring 3.0 is to ensure high performance and better security. The latest iteration of Loopring ensures traders can withdraw their funds, no matter what the situation is. Traders can withdraw their funds in worst-case scenarios as well via Merkle Proof’s that are generated from the on-chain information. No need to rely on third-party resources to seek help during recovering digital assets.
Conclusion
Loopring is the high throughput decentralized exchange protocol. LRC is an Ethereum (ETH) based DEX protocol. Loopring is created to enable traders to exchange their assets across several exchanges of their choice. Keeping it simple, Loopring (LRC) is not a DEX protocol, but it facilitates DEX using two methods i.e zkRoolups and order matching.
