LoopRing is a decentralized exchange protocol that runs on top of the Ethereum blockchain, employing an open source protocol. However, the platform does not operate in itself as a decentralized exchange house, but rather offers its users the opportunity to exchange cryptocurrencies between different exchange houses.

Although Loopring currently only accepts ERC20 tokens, its goal is to create a network of exchanges that would ensure the best prices for all merchants. For this they expect that all the exchange offices, centralized and decentralized, incorporate the LoopRing protocol into their systems so that each Exchange can access the order books of the other exchanges, thus increasing liquidity and offering its users the best prices (cross orders).

Think that with this protocol you could buy coins in any exchange through your only Loopring account, without the need to deposit your coins in the exchange since your balance would never leave your wallet. This protects your investment from possible hacks, thefts and even possible bankruptcies from some exchanges.

The project was born in 2016 from the hand of Daniel Wang, with the aim of bringing the necessary technology to promote decentralization to the exchange market, since the decentralized platforms existing to date were usually guided by the rules of traditional centralized exchanges .

It was initially conceived as an open source protocol in response to the limitations of traditional exchanges, responsible for scandals like that of Mt. Gox (one of the largest Bitcoin exchange houses) that suffered a continuous theft of Bitcoins worth 400 $ million due to security issues.

Value of the LRCs
Since its creation, Loopring has maintained a tone very similar to that of other cryptocurrencies. In 2017, it comes out to the markets with a low, but respectable price of around $ 0.11 to start an upward path until December. During this month and later, dragged down by the rest of the cryptocurrencies, Looprings exceed $ 2 per token, their highest historical value.

After this price explosion, the tokens gradually deflate until practically reaching their starting price. However, Loopring has managed to survive the fall and is currently among the 100 cryptocurrencies with the highest capitalization volume in the world.

How is LoopRing different from Bitcoin?
Unlike other exchanges, the Loopring protocol and its decentralized nature eliminates the so-called “single point of failure”, that is, it prevents a defective component (hardware or software) from causing a global system error that It would take the exchange out of service.
Secure transactions: when a transaction is carried out, the user's coins do not leave the wallet until they find a shared one and the effective exchange occurs, which does not find parallels in other exchanges.

How does this work? Let's say you want to buy Ethers with your Bitcoins: first you request the purchase (however, while the process is underway, LoopRing will not block your Bitcoins, but you can continue to use them), then your order is sent to the network where it is verified and Received by the miners (they help validate the transaction), LoopRing receives the information and, after doing its checks, authorizes the change that is carried out through a smart contract between the two participants.

There are other protocols to create decentralized exchanges, such as 0x, Ripple or Bancor, but they have shortcomings and limitations. For example, 0x only accepts OTC (Over the Counter) orders, an unclear mechanism to compete with other exchanges and lacks a system to protect miners.

While Loopring relies on the technology of these platforms to bring new solutions to decentralized exchanges: its own LRC mining software, a circular algorithm (ring) that always searches for the best prices for cryptocurrency exchanges between various providers, etc.

Contrary to many dEXs, LoopRing facilitates mining, with a maximum amount of coins much higher than Bitcoin or Litecoin: 1,374 million vs. 21 million and 84 respectively.

How does LoopRing work?
Loopring is a decentralized protocol that runs on the Ethereum blockchain and employs its ERC20 token upon which its own LRC coin is based. It also integrates the Ethereum smart contracts in its system to be able to trade with the rest of the ERC20 tokens.

These “smart contracts” are crucial because they execute themselves (without third party intervention), which means that once the conditions are written, the probability of human error is almost zero. In addition, they work to complete actions such as calculating exchange volumes and prices between two tokens, interacting with other smart contracts and the Loopring API (a programming interface), and updating the orders of the databases.

To ensure the best prices, the Loopring protocol allows miners to make multi-token transactions, thanks to the circular or ring algorithm (called “ring”). This algorithm receives the order to sell or buy (that is, how much you want to sell / buy and in which cryptocurrency). With this information, searching for the best value for money, in other words, circulates through the available cryptocurrency pairs until you find a satisfactory result, which can be in LRC or another ERC20 token.

LRC tokens currently have two applications on the platform: one as a transaction fee and as a reward for miners who help validate transactions. In the future, the Loopring team hopes to add more commercial uses to their currency, so that they can attract more users.

Furthermore, the network nodes can deny the service according to their own criteria, which means that they can protect themselves if necessary. These nodes also have the ability to monitor suspicious-looking accounts and act on this information.

How a step-by-step transaction is executed
First, the user sends a transaction order to the loopring Smart contract through his wallet (Loopring.io). This request is simultaneously broadcast to network nodes (called relays) outside the blockchain.

Naturally, the nodes are in charge of keeping the accounting books updated and, in this case, transmitting the order to the miners (Ring-miners).

These miners help validate the transaction and find the best prices through a comparison system called “ring-matching” that works as follows: let's say that you want to change your Ethers for Bitcoins, another user on the network wants to change their Bitcoins for Dash and a third party their Dash for Ethers. LoopRing groups all these orders into the so-called “rings” that contain 2-16 orders through which all requests can be accommodated (in case there are not enough coins for everyone, the missing order is added to the following ring).

Once the transaction is validated, the exchange is executed within the Loopring smart contract and its blockchain.

Mining
LoopRing coins can be mined and therefore ring miners receive rewards in LRC. This is so because said miners are in charge of finding the best prices for a transaction, in exchange they are left with a margin that is stipulated in advance, either fixed or shared with the user.

Where to store my LoopRings? Wallets:
LoopRing has also designed its own wallet through which you can directly buy cryptocurrencies (ERC-20). It is available in Loopr web version and for mobile with iOS as a non-custodial wallet (Loopr iOS).

As it is the standard Ethereum token, it is also available in most wallets that support ERC-20.

How to buy or get LoopRings?
Buy LRCs: you can get LoopRings in some of the best known exchange houses in the world such as Binance, Upbit, Bittrex and of course, in their own dEX, either through their wallet or without using a private key with their version web Circulr.

Earn LRCs: You can also earn LRC as a reward for assisting in mining processes.

LoopRing in the future: is it worth it?
The fact that Loopring is designed and programmed by Google developers and backed by the NEO cryptocurrency will make people gain confidence in this asset, and decide in the future to invest in it and adopt it as a payment method as various businesses and services.

The long-term objective and ultimately the future goal of Loopring is to increase the liquidity of cryptocurrencies, and pave the way for the financial system as we know it to change its structure and rules of the game in the future. , towards a decentralized and fairer model with consumers.