Loopring —— A Scalable ZKrollup Exchange Protocol
- Loopring aims to build an open protocol for scalable, non-custodial, orderbook-based exchanges on Ethereum by leveraging zero-knowledge proofs.
- The project team claims that with zkRollup, Loopring 3.0 can settle up to 2,025 trades per second, while guaranteeing the same level of security as the underlying Ethereum blockchain.
- loopring.io currently provides 4 trading pairs: LRC/ETH, ETH/DAI, ETH/USDT, and USDT/DAI.
- All LRC holders can stake LRC to earn part of the protocol fees paid by all exchanges built on top of Loopring. Loopring DEX owners must stake some LRC for economic security and building their reputation. The same LRC staked by a DEX owner for reputation will also reduce the protocol fee the DEX must pay for each trade.
Loopring is an open multilateral transaction protocol between tokens based on ERC20 and smart contracts. Through this agreement, a decentralized exchange application that does not require asset custody and fund freezing can be established. Adopting decentralized technology, providing a zero-risk token exchange model, and allowing multiple exchanges to conduct off-chain matching and on-chain clearing and settlement of the same order through competition. LRC is a Loopring Technology token on Ethereum. LRC holders can pay the lowest transaction fees; benefit from all network activities.
An order in Loopring can be broadcast to multiple exchanges and matched by these exchanges in parallel. An order can be matched partly by one exchange, and partly matched by another exchange. There is a competitive relationship between exchanges, so orders will be matched faster and better (at the best price). Using Loopring to place an order, the transaction will not be matched in time because the exchange is attacked by DDOS.
- The matching system it provides is an automated (non-human intervention) matching system that supports pair matching and loop matching. There is no other project involving the same mode.
- It broadcasts the same order to different exchanges or matchmakers (which can be wallets), and matchmakers can compete to match the order or part of the order to achieve the fastest and optimal matchmaking plan.
- Cost saving and profit sharing. The matchmaker can directly charge a handling fee when matching orders, or can choose to obtain the difference between the matched orders, that is, cost savings and profit sharing. Improve the liquidity of tokens in a variety of ways.
LRC is a Loopring Technology token on Ethereum. LRC holders can pay the lowest transaction fees; benefit from all network activities. LRC token has following two roles:
- As a matching fee: LRC can be specified as a matching fee paid to the exchange in the order.
- As an exchange registered mortgage: The exchange can mortgage a certain amount of LRC tokens to the smart contract. The exchange can apply for the unfreezing of mortgage tokens at any time, but after the application is submitted, only the locked tokens can be transferred out after one year. Not all exchanges must register for mortgage. Another function of exchange token collateral is to prevent exchanges from frequently changing their identities in order to discard unfavorable historical statistics.
The founder and current CEO of Loopring Foundation, which manages the development of Loopring protocol, is Daniel Wang, a software engineer and entrepreneur based in Shanghai, China.
Wang has a bachelor’s degree in computer science from the University of Science and Technology of China, as well as a master’s degree in the same field from Arizona State University.
Prior to starting work on Loopring, Wang has held multiple managerial and executive positions in major tech companies: he was a lead software engineer at the medical device manufacturer Boston Scientific, the senior director of engineering, search, recommendation and ads system at the Chinese e-commerce giant JD.com, as well as a tech lead and senior software engineer at Google.
Wang has also co-founded several companies: Yunrang (Beijing) Information Technology Ltd. and the cryptocurrency services firm Coinport Technology Ltd.
Most of the Loopring Protocol team members have entrepreneurial experience in digital asset exchanges, and the technical staff is composed of engineers from large Internet companies such as Google, Ant Financial, Meituan, etc. They all have certain accomplishments in their respective fields.
There are currently three products under Loopring Protocol:
- Decentralized exchange based on order book: In this field, the Loopring Protocol is currently a well-deserved leader, and is on par with another Uniswap based on the AMM model.
The order book model is not significantly different from traditional centralized exchanges in form, but Loopring Exchange’s assets are in the hands of users, while traditional centralized exchanges are in the hands of others. This is the biggest difference.
- AMM-based decentralized exchange: This product refers to the current mainstream constant product algorithm design, which is very similar to Uniswap. But Loopring Swap is based on Layer 2, which is faster and lower transaction costs.
- Loopring payment: The high gas fee of the Ethereum network is nothing new. It was even reported that a transaction cost 0.9 ETH (approximately US$320) in a sky-high handling fee. But with Loopring payment, users don't need to pay a handling fee, and it will arrive almost instantly.
Loopring Payment is based on the zkRollup technology, performs all calculations in batches off-chain, and only submits a small proof to Ethereum for verification. This means that we use Ethereum as a data layer and a proof verification layer instead of a computing layer. Since this can be verified within a few milliseconds, the use of zkRollup technology can greatly improve scalability.