The Loopring Protocol: What’s the hype about?

The Loopring Protocol: What’s the hype about?

By Md Ausaf Rashid | Crypto_Gateway | 2 Nov 2021


Loopring Protocol

According to the official website, Loopring protocol is an open-source zkRollup protocol.

Let’s unpack it. First, let’s understand Zero-Knowledge proofs. In a nutshell, a zero-knowledge proof is a method by which one party (the prover) can prove to another party (the verifier) that a given statement is true, without conveying any information apart from the fact that the statement is indeed true. This sounds paradoxical and even impossible, but with some clever mathematics, it’s very much possible, and it’s the working principle behind tokens like MINA protocol and Z-Cash. For example, a zero-knowledge proof might enable a government agency to verify that you are above the age required to access a website, without revealing your exact birthdate.

Here’s an article by CoinBureau explaining it in detail.

So what does the Loopring Protocol do? It allows the creation of decentralized exchanges. It provides a set of Ethereum smart contracts and zk circuits to provide an open standard, on top of which you can build any Crypto DeX or even a payment app. In some way, it's like a blueprint to make a decentralized exchange like PancakeSwap or ShushiSwap. So how is it better than the existing solutions? Well since it uses ZK proofs, it makes it highly secure and highly scalable. Remember, in ZK proof one party can prove a contract has been carried out, without even releasing the details about it. That's the reason it's so secure and anonymous, and that's exactly why ZK proofs are used by ZCash too.

Tokenomics

  • Symbol: LRC
  • ERC-20 Compliant: YES
  • Total Supply-Fixed: 1,375,076,040
  • Token Address: 0xBBbbCA6A901c926F240b89EacB641d8Aec7AEafD
  • Proof-of-Stake
  • More Details about LRC Tokenomics

Summary

So, all-in-all, Loopring seems to be a promising crypto project, which can potentially create a much-needed integration between the decentralized exchanges, significantly increase the retail money & participation in DeFi projects by nearly eliminating gas fees, and decreasing transaction times. With a relatively low market cap and a potential partnership with GME, the LRC token seem to have solid fundamentals to grow both in the short & long term. That being said, it might face competition from other projects and ecosystems in the DeFi space, and even other L2 solutions that scale-up Ethereum. So will Loopring become the de-facto DeX protocol? Only time will tell.

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