O looping (LRC) is an open source protocol created to serve as a decentralized exchange using as a security foundation the Ethereum, being seen as a second layer. Using zkRollups technology, the network gets cheaper rates than Ethereum and with smart contracts it validates thousands of transactions on Ethereum. In this way, Loopring combines the best of the centralized exchange (CEX) market with its low fees and the transparency of an open and verifiable protocol.
How does Loopring work?
With this protocol it is possible to create NFTs, transfer and trade Ethereum tokens cheaply. How is this possible since Ethereum transactions are extremely expensive? The technology of “zk Rollups” is the secret.
What are zkRollups?
It is a scaling solution for Ethereum. It can scale as it does the heavy lifting of computing and creating transactions outside the main Ethereum network. However, security is maintained due to cryptographic proofs that validate thousands of transactions through a smart contract on Ethereum. That is, the Ethereum blockchain creates an attestation of validity in the transactions of the off-chain network of Loopring. Users benefit from a non-custodial, fast and secure solution. Due to these characteristics, the Loopring manages to do ~100 to ~200 times more transactions than Ethereum at a lower cost and greater security than other solutions. The project’s official page claims the capacity of 2025 transactions per second. As the data is submitted to the blockchain, we can say that the security is similar to that of Ethereum itself. Orders in the order book are made using a method called order ring (ring order), where you can triangulate between different orders and assets to close a set of transactions. The miners of these transactions are the ring miners and receive a percentage of the trade, almost like market makers. As a result, the network participants themselves tend to provide liquidity to the solution. It is due to ring miners and ring orders system that cryptocurrency is called Loopring.
Protocol security risks
However, there are features and risks that users should be aware of. Loopring works through a relayer to bring transactions from the network to the blockchain. This relayer is operated by the project’s creators and is closed source, which is a major weakness. It is worth mentioning that the protocol can contain errors, potentially even leading to the loss of funds or at the very least the network crash.
Who created Loopring?
The founder of the Loopring Foundation and the creator of the project is the Chinese Daniel Wang, a software engineer with a degree in Computer Science from the University of Science and Technology of China. Wang worked at JD.com, Boston Scientific and founded the companies Yunrang Information and Coinport Technology Ltd.
Loopring partnerships and growth
The solution has gained prominence with the recent partnership with the company GameStop to create a market place for NFTs. The number of wallets surpassed 25,000 on March 22, 2022, according to data from Dune Analytics:
Where to buy and store LRC?
The LRC can be stored in wallets like MetaMask which communicates with a web interface to allow transactions on the Loopring network. The LRC token allows the payment of fees and is fundamental to the functioning of this scalability layer. LRC is available in Brazil on Novadax with the real pair and on exchanges such as Binance, Kucoin and Gate.io in different pairs. Buy and Sell Bitcoin and Other Cryptocurrencies on Coinext
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