Here I will post shortly about Loopring and you can read more on my previous post. Then I will explain why there is a word "Warning" in the title. My whole post will be a mix of multiple posts and current LRC price on market. Click here to read team last post on medium.
Loopring Scalable Non-custodial Exchanges
Loopring, in summary, offers high speed, low fee, and decentralized exchange promise to its users and community. Putting aside all the advantages and disadvantages of decentralized exchanges, one thing makes Loopring project competitive is the promised speed per second. Loopring uses Ethereum blockchain and is guarantied protocol to ensure safety and non-custodial feature.
Staking LRC Token
Loopring team also anounced staking implementation and rewarding LRC token holders. They promises a fair distrubution of rewards based on staked coin number and time of staking. For example, if a user stakes 100 LRC for 30 days and another user stakes 30 LRC for 100 days at the same time, each one will receive %50 reward. Of course this is a basic math if only 2 users stake LRC.
Staking Rewards Source
Each time a transaction takes place on Loopring protocol, there is going to be a fee. The fee will be 0.02% for makers and 0.04% for takers. Fees will;
- 10% burned - destroyed
- 20% allocated for a future Loopring DAO (decentralized autonomous organization)
- 70%, the staking rewards (holders with 90 days period of staking)
Why to Stake LRC
Staking LRC has 3 advantages that are built to increase the use of LRC coin, utility token. A utility token powers a system by encourage community
- Anyone trading cryptocurrency on an exchange (by Loopring protocol) can stake LRC to recive 70% protocol fee as a reward (custom staking).
- To create economic security and reputation, exchanges need to stake LRC token (service-level guarantee). Minimum of 250,000 LRC to 1,000,000 LRC based on data availability.
- LRC token will be used as a utility token to lower protocol fee on exchanges. The exchange owner will benefit (Taker: 0.050% -> 0.025%
Maker: 0.025% -> 0.0%. However, owner must let makers to receive rewards from custom staking. trade on www.binance.com
The table taken from official post on medium. Which shows Loopring protocol upgrades and how changes occurs on network speed and protocol fee.
What is the Warning?
In their medium post, they talk about a golden staking time. The purpose is to let community have chance to stake LRC coins as many as they can before team starts staking. Wait team will stake LRC itself? YES, they will, actually, they have been staking since Dec 5, 2019 (10,000,000 LRC coins at once). This staking was from Loopring’s Ecosystem Advancement Fund (LEAF). The team has been staking LRC since then but not from LEAF but the allotment of the Loopring team itself (20% of total supply).
This staking will continue for 2 years (starting from September 2019) with 1/24th/month rate. That means every month a 1/24 ratio of unstaked LRC coins will be staked by the team. And they ask you to have faith in them by saying
"However, we have not and will not be withdrawing the vested LRC to sell it — we are locking it further in the v3 staking contracts, a testament to our faith and commitment to the protocol and LRC holders"
A decentralized idea has a staking feature and its team stakes its protocol cryptocurrency??? I do NOT know what to say... but if you like to stake LRC here they have explain it well. To purchase Loopring (LRC), click here.