What is Loopring (LRC): The Future of Decentralized Exchanges

What is Loopring (LRC): The Future of Decentralized Exchanges

By CryptoSorted | CryptoSorted | 14 Apr 2020


You must have noticed from your Publish0x payment dashboard the addition of a new tipping token called Loopring (LRC). The first question that might come to your mind is what is Loopring? Is it a valuable token? What is the price now? what is the potential and future price predictions?

We believe since you may soon be receiving this token on Publosh0x, it’s good you know as much as possible about it –including where and how to buy Loopring outside of Publish0x.

So without wasting any time, let’s find out what this new shining token now on Publish0x is all about.

What is Loopring (LRC)?

Loopring is a decentralized, blockchain agnostic exchange protocol that makes it possible for users to buy and sell cryptocurrencies across multiple exchanges at the best rates and faster speed, all without your funds ever having to leave your wallet.

Watch this short introductory video from the team.

 

The Loopring Team

Loopring was founded by Daniel Wang who is also the CEO. Before starting Loopring, Wang was part of the team at Coin Port back in 2014.

According to him: “At that time,” he told Coin Central in an interview, “[I was] trying to solve the problems of centralized exchanges, and then I realized that it’s not possible.  Those problems are inherent to the centralized exchange model.”

At some other time, Wang was Google Tech Lead and a co-founder and VP of Yunrang Technology.

Other top management personnel includes:

Jay Zhou (Loopring’s CMO) –formerly part of the Ernst and Young Team, co-founder of SJ Consulting, and member of PayPal’s Risk Operations unit.

Johnston Chen (Loopring’s COO) –previously the Chief Information Officer (CIO) 3NOD.

Along with a host of developers, engineers, advisors, and contributors as can be found on their Team Page.

 

How Does Loopring Work

We will try to explain how Loopring works using the below simple illustrations:

  1. You want to trade 10ETH for say 100,000 BAT for example
  2. Your ETH is right in your MetaMask Wallet or any WalletConnect-compatible Wallets that you control the Private Key (PK)
  3. You connect your wallet to the Loopring decentralized exchange engine
  4. You sign off an order to sell your 10ETH for 100,000 BAT with your PK
  5. Your order is automatically matched and executed across multiple exchanges at the best rates.
  6. The Loopring smart contract settles and closes your trade when fully matched and you receive your BAT in your wallet.

Note: Even while your order is set, you can still whatever you want with your funds –including sending out of your wallet as your crypto was never sent to the exchange nor locked down because you placed an order.

However, if you move the funds from your wallet, the smart contract will be notified that you do not have enough funds anymore and the trade will never be matched or executed until and except the smart contract detects the required amount of funds in the wallet.

LRC is the native cryptocurrency of the Loopring ecosystem and is used to pay for transactions and miners' rewards.

 

The utility of the Loopring (LRC) Token

In the new and latest version, -Loopring 3.0, LRC is becoming a stake-able token, to be used in 3 types of staking.

1. staking to reap rewards,

2. Staking to secure exchanges

3. Staking to enjoy reduced fees.

According to the project:

  • Anyone can stake LRC to earn a share of 70% of the protocol fees of all exchanges built on top of Loopring. (20% will fund the Loopring DAO and the remaining 10% will be burned).
  • An exchange owner needs to stake LRC as a collateral that they will continue to operate according to the rule. Exchanges that try to manipulate the system will lose their staked LRC and be removed from the network.
  • Also, Exchange owners, Market Makers and Frequent Traders can stake LRC in order to enjoy lower protocol fees on a specific exchange.

Features of Loopring and Why it May Be the Better Alternative

Some unique and special features of the Loopring protocol are:         

  • Security
  • Fast
  • Low Cost
  • Decentralized
  • Order Sharing
  • Ring-Matching
  • Cross-Chain Interoperability

 

1. Security

With Loopring, you don’t have to send your tokens to an exchange to trade them. So the issue of hacks, exchange bankruptcy and DDOS attacks that may put your funds at risk does not arise.

All tokens remain inside of the users’ wallet during the entire exchange process – and can even be transferred out if you wish. Thus ensuring the security of your funds at all times.

Nobody in the Loopring ecosystem needs to trust any other party as crypto assets are always under users' control through all stages of an exchange.

 

2. Fast

By batch-processing thousands of trade orders off-chain, Loopring can power highly scalable decentralized exchanges.

Thus even if the Ethereum blockchain, for example, is slow, Loopring can still execute orders on a scale.

The latest version –Loopring 3.0 can settle up to 2,025 trades per second without sacrificing Ethereum-level blockchain security.

This is made possible through the use of a technology known as zkRollup, and a feature called On-Chain Data Availability (OCDA).

 

3. Low Cost

By batching and executing orders outside of the Ethereum blockchain Loopring can significantly reduce associated transaction fees to fractions of a cent.

According to information on their website, “it costs roughly $150 per million trades, which covers the gas for Ethereum transactions and the cost of proof generation on cloud computing platforms”.

Decentralized exchanges running on the Loopring protocol can further lower the settlement cost by using cheaper servers in the cloud and GPU-based algorithms.

 

4. Decentralized

As already stated, orders are automatically executed while traders' funds remain under their control in a decentralized smart contract on the blockchain.

 

5. Order Sharing

Using its unique feature of Order Sharing, Loopring can break orders into smaller pieces, identifies the best exchanges and times to trade those pieces on, and applies game theoretic logic to optimize trading results.

 

6. Ring-Matching

By pairing users with matching orders and connecting users to multiple exchanges and blockchains, Loopring can bring on liquidity levels that are far greater than available by trading directly in the various exchanges and markets.

 

7. Cross-Chain Interoperability

The Loopring protocol was designed to be blockchain agnostic –meaning it is not restricted to a single blockchain.

Just as it can connect to al exchanges and fetch trade results, the Loopring protocol can be seamlessly integrated and implemented with any smart-contracted supported blockchain as NEO, Ethereum, etc.

 

Loopring Fast Facts

  • Total Supply            1,374,813,985 LRC
  • Max Supply             No Data
  • All-Time High          $2.59 USD                     (Jan. 09, 2018)
  • All Time Low            $0.019861 USD             (Dec. 18, 2019)

 

Loopring (LRC) Price and Future Prediction

Currently, the Loopring token is trading at 0.0273, that is 45% below the launch price according to CoinMarketCap.

What does that mean? The project is most likely currently undervalued –or it was initially overvalued.

However, because most cryptocurrencies are trading far below their all-time high due to the prevailing market conditions it might be safe to conclude the current price of the LRC token does not reflect its true worth.

So what’s the potential price for the next 1 to 2 years?

Looking at the initial price of $0.02 (approximate) and comparing it with the token’s all-time high price of $2.59 –that’s about 12,850% difference.

If the market should witness another bull run similar to 2017 to early 2018 we could see a 1000 to 2000% price appreciation, which will put the price of 1LRC at about $0.55.

Do you feel this is achievable in the next expected bull market? Share your opinion with us in the comments section below.

 

Final Thoughts

  1. Loopring enables the interconnectedness of exchanges –thus increasing liquidity among all markets that operate on Loopring.
  2. With Loopring, there’s no need for arbitrage trading, as the protocol scans all markets and exchanges to match orders with the best and lowest prices.
  3. Through order sharing and ring-matching technology, Loopring can provide unmatched liquidity and flexibility compared to traditional centralized and decentralized exchanges.
  4. Loopring can be implemented on any smart-contract blockchain –thus orders can be executed through multiple channels and markets.
  5. Loopring could be what decentralized exchanges need to go main-stream as they’re currently just a shadow of their name.

Will Loopring enable the realization of truly decentralized exchanges with the functionality and convenience of centralized exchanges? Will you HODL, Trade or Stake the LRC tokens you earn here? Share your opinion with us in the comments section below.


CryptoSorted
CryptoSorted

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