Loopring was founded in 2016 by Daniel Wang, the former technical director of Google. After the team used zkRollup to solve the scalability and throughput problems, the team launched a decentralized trading platform, Loopring. The cost of each transaction of the Loopring protocol on the Ethereum main network can be as low as 0.001 RMB. It can also finish 2025 transactions per second, which removes the barrier, and guides the performance of Ethereum to the way of encrypted financial development.
Loopring is an open, ERC20 and smart contract-based multilateral transaction protocol between tokens. The team believes that the future of blockchain finance will be on top of Ethereum Layer 2. It adopts decentralized technology, provides a zero-risk currency exchange model, and allows multiple exchanges to match the same off-chain order in the competition and finish on-chain clearing and settlement.
Loopring is also a non-custodial transaction protocol. The code is 100% open-sourced and has been audited by an independent third party, so any user in the ecosystem does not need to trust others. zkRollup guarantees that assets are always under the user's own control. And based on non-custodial technology, it allows DEX to be comparable to CEX in terms of performance, speed, and cost without reducing security.
How LRC works
In Loopring, the user only needs to use the private key to authorize the order on the chain. The decentralized network of the Loopring protocol can broadcast the order to the whole network without escrowing the asset, and it does not affect the transfer of the asset in the wallet. That is to say, after an order is initiated, it will be broadcast to multiple exchanges, and then matched by these exchanges in parallel. And if each exchange wants to win the order matching in the Loopring protocol, it must be the fastest in speed and offer the best price in the competition.
The matching system provided by the Loopring Protocol is automated and can be performed in a decentralized manner while supporting pair-matching and loop-matching. The matchmaker can directly charge the handling fee when matching the order, or choose to obtain the price difference between the matched orders, that is, the cost saving and profit sharing, and improve the liquidity of the token in various ways, thus solving some drawbacks related to efficiency in the centralized transaction.
In Loopring 3.0 and above, Loopring uses Zero-Knowledge Proofs (ZKPs) to upgrade the high throughput of transactions and verify system transitions. Due to the characteristics of the protocol, the protocol layer can be implemented on multiple smart contract public chains, and its stable operation does not depend on a specific trading platform.
What is LRC?
Issued on August 31, 2017, LRC is the token of the Loopring protocol. It has a total supply of 1,395,076,054 LRC. It can be used to incentivize liquidity providers, insurance companies, and the protocol consensus behaviour of DAO managers.
LRC has been a part of the Loopring protocol since its inception. It has a great “voice” in the Loopring protocol ecosystem, provides good support for the research and development of the protocol and product suite, and further promotes its growth to Ethereum L2.
If you hold LRC, you can specify it in the order as the matching fee to be paid to the exchange. If there are several transaction orders, LRC is used to measure the income under the matching transaction of different exchanges, which will be easier to calculate. In addition, it is also possible to mortgage LRC in the Loopring platform to ensure security, reduce transaction fees, win voting rights and get rewards.
LRC Crypto Wallet
In addition to placing LRC in the Gate.io exchange for easy trading, users can also save LRC in a crypto wallet.
Loopring Wallet is the official smart wallet of LRC. It is based on smart contracts and adopts a pluggable and modular design. With native zkRollup Layer 2 integration, Loopring Wallet enables unlimited expansion of EOA wallets, and users can now trade directly on Loopring L2.
Loopring Wallet separates identity and security. In addition to self-control, users can choose to authorize trusted people, institutions and hardware to protect the wallet. The fully self-custody approach allows users to enjoy the freedom of managing their crypto assets.
After integrating Loopring's Layer 2 zkRollup technology, the transaction speed can be increased. Deflation and fees have also been reduced to a certain extent, and the same security guarantee of the Ethereum main network can be retained. Through user authorization, Loopring Wallet can also be continuously upgraded to adapt to future scenarios.