Recently, Publish0x added Loopring coin on tipping. Loopring is "An Open Protocol for Scalable, Non-Custodial Exchanges". Now, readers and writers can receive tips in cryptocurrencies such as basic attention token (BAT), DAI, and Loopring(LRC). Here I will shortly write about Loopring and what it offers.
The word custodial and non-custodial means centralized and decentralized respectively. The legend, Satoshi Nakamoto, and his/her/their idea of peer-to-peer transaction of value/information has only one purpose, decentralization. That is, no middleman, bank, or government during a transfer of value to be validated. Some saying if you do not hold your private keys, you don't own your coins. Somehow, it is true. Thinking of centralized exchanges, if you purchase a crypto coin, lets say some bitcoin, and leave it on the platform, you actually own a representation of their savings in their database. However, you only and truly posses coins if you hold a private key to verify it on blockchain.
Advantages and Disadvantages of Decentralized Exchanges
Decentralized exchanges are built on blockchain technology. This feature allows user to have a trading experience using wallets that they have full or partial control. There are backed up by blockchain technology which makes them more secure against hacking. Decentralized exchanges (DEXes) provide peer-to-peer trading experience while all transactions are recorded on blockchain. This makes transaction history open to everyone. DEXes are honoring the concept of privacy and the main goal of cryptography.
If someone just got into cryptocurrency and blockchain technology, I personally do not recommend using a non-custodial exchange. Let me explain my reasons. They are usually offering in-chain tradings. In more words, if it is built in one blockchain, it is hard to trade different blockchain digital token. Some DEXes have come with a solution to overcome this by implementing cross-chain trading features like "wrapping".
Next thing to worry about is the speed. DEXes are built on a unique blockchain algorithm. This means each transaction has to be verified and add a block on chain. Adding a block on chain depends on block creation rate. So, this may take some time if you consider fast buy/sell orders. Most of the DEXes offer about 2-3 transaction per second.
Another important thing is user friendly interface. We are in 21th century and we all want some kinda good looking, updated, and easy to navigate GUI. DEXes are mostly created in old fashion ways to create a look for pure coding result. Their interfaces can be outdated easily and cause users to leave for exchanges offering up-to-date tools. Decentralized exchanges are more for those who have experienced in blockchain technology. For traders, it is more valuable to exchange cryptocurrencies during an active market move.
Advantages and Disadvantages of Centralized Exchanges
Simply, centralized exchanges (CEXes) are not built on blockchain technology. Instead, all transactions and technology are accumulated in a data storage that they own, like banks. Even though centralized exchange idea is against peer-to-peer transaction, it has advantages over non-custodial exchanges. Besides advantages of lost password recovery or account verification, there are gaps in centralized exchanges.
Centralized exchanges offer high-speed performance on tradings that is usually hard on pure blockchains. Blockchains are limited to a block creation rate that each block is added to its chain. Also, it brings more attention and create fast adoption among society by offering services such as purchases with credit cards or wire transfers. In such case, centralized exchanges are building trust to experience cryptography products, blockchain and digital payments, for those who are just in exploring digital payment era.
As the privacy is main goal of blockchain technology, centralized exchanges face big hacking threats. Whats more is that non-transparent operation and evidence of market manipulations. Almost all of the centralized exchanges released their tokens to use them as utility token. Utility tokens are used to cover expenses like fees during trading. However, the lifetime of such coins are depend on the existence of their centralized exchanges.
Last thing I want to point out is the fees. Fees can vary a lot based on many parameters such as regulations, operations reasons, and middleman share (exchange's profit). That may not be an issue right now, but as the blockchain technology receives huge adoption it will be a reason to leave centralized exchanges due to high fees.
Saying all these above, let me go ahead with Loopring...
Loopring (Scalable, Non-Custodial Exchanges)
This non-custodial exchanges technology also defending the concept of peer-to-peer transactions, privacy. It is operating on Ethereum blockchain technology with 100% Ethereum-level security guarantees. Loopring introduced Zero-Knowledge Proofs to speed up trading performance. ZKPs gives privilege to Loopring among other DEXes.
Another thing is cost of transaction. Let me copy from its official website: "Loopring performs most operations, including order-matching and trade settlement, off the Ethereum blockchain. Such a design dramatically reduces gas consumption and thus overall settlement cost to only fractions of a cent."
Loopring technology last increased its speed up to 2025 transactions per second with Loopring 3.0 release. This feature creates a chance for non-custodial exchanges to compete custodial ones. With low transaction fee (0.0002 gas fee) and speed/sec, Loopring non-custodial exchanges can have big positive impact on blockchain technology.
Check out decentralized exchange loopring.io here.
Loopring (LRC) on Market
- Ticker LRC Value is $0.027877 USD (+3.71%)
- Total Supply is1,374,813,985 LRC
- Circulating Supply is1,024,323,329 LRC
- Market Cap is $28,555,225 USD, 4,053 BTC, and 166,350 ETH
- All time High and Low is $2.59 USD and $0.019861 USD
- Loopring ROI is -44.25%
- Market Rank on CMC is 112
To read more about Loopring and LRC coin, click Loopring.org or Coinmarketcap. If you are interested in buying, selling, or trading Loopring, click here.
Let me know if you like it. Sincerely.