loopring - cryptocrypto.co.za

All you need to know about Loopring

Loopring is an open protocol that allows you to build high-performance order book-decentralized exchanges on Ethereum. Their goal is to allow the creation of highly scalable exchanges, without having to compromise Ethereum-level security guarantees via a zkRollup.

History

Loopring’s main objectives are to reduce user dependence on centralized exchanges and other trusted third parties, as well as enabling global liquid market access. This is achieved by the Loopring protocol, which encourages ecosystem participants to perform exchange functions decentralizedly and trades processed using non-custodial smart contract.

Blockchains are inherently trustworthy and allow for trading. However, it is difficult to build an exchange purely on-chain. Particularly, speed, throughput and computation costs. It can be costly or impossible to replicate centralized exchange performance and speed by performing all exchange steps on-chain. Loopring has therefore moved most computation and data off-chain, but uses zero knowledge proofs in order to preserve trust-minimized properties.

Loopring was originally designed to be blockchain neutral and operate on all large public blockchains that have smart contract capabilities. Loopring was initially deployed on Ethereum in order to trade ERC20 tokens. It uses its LRC token for operation. It deployed on top NEO, and also airdropped a native LRN. However, this effort has been halted. It was planned to launch a similar launch on QTUM using an LRQ token, but it was canceled completely.

Roadmap

Loopring v1 Release

Date December 2017,

First LRN airdrop

Date July 2018,

LRC holders were given LRN by NEO, an airdropped version the Loopring token.

Second LRN airdrop

Date September 2018,

1.5 million LRN was dropped to 758 EEO addresses bound for 892 Ethereum addresses

Third LRN airdrop

Date November 2018,

Total of 2.1 Million LRN was dropped to 854 EEO addresses, which corresponds to 1039 Ethereum addresses.

Loopring 2.0 released

Date December 2018,

was a protocol upgrade that allowed for more efficient ring settlement, new fee models, and additional ways of creating orders.

Loopring 3.0 release

Date December 2019,

Loopring’s second major upgrade brought the first zero-knowledge rollup DEX protocol onto the Ethereum mainnet.

Token Usage

Information Key

Token Type ERC-20 Token Uses Access and Work

LRC tokens can be used to stake in the protocol pool, which receives 70% of all fees. To receive their share of the fees, any user can stake for at least 90 days.

Safety and reputation are important factors for exchange owners. An exchange that has data availability must have a minimum of 250,000 LRC and an exchange that does not have data availability must have a minimum 1 million LRC. If the exchange pays out funds or shuts down, funds can be withdrawn. Otherwise, they will be reduced. To reduce maker/taker fees, exchanges can stake additional tokens.

Schedule of Supply

Information Key

General Emission Type Deflationary Precise Emission Type Programmatic burning Capped Supply Yes

Details

Half of the tokens that were allocated to investors did not have lock-up. 30% of tokens were given to the Loopring Foundation. 20% was reserved for founding team members and subject to a 2-year lock-up. The tokens become monthly for a period of 2 years (1/24 monthly) after which they are forfeited. 10% of Foundation tokens remain to be paid to auditors, contractors, exchanges and other fees. The Loopring Ecosystem Advancement Fund will receive 3.2%. Total 21.1 million LRC tokens were burned. LEAF was established to reward community contributors as well as developers. LEAF currently holds 16.8% LRC tokens and will soon hold 20% with the Foundation’s 3.2% incoming. It already pays community members for technical contributions and non-technical ones.

Loopring provided investors with the opportunity to lock up their LRC in smart contracts to receive interest (5%), at a later date. These smart contracts were the mid-term incentive (6-9 months) or the long-term incentives (18-36 month). The mid-term has been unlocked, while the long-term contract contains 115.3 million LRC. These LRC will be released in March 2019 and can be withdrawn within 18 months.

Technology

Loopring employs a traditional order book exchange model, but all computation is moved off-chain using zero knowledge proofs. A user can deposit funds by sending assets to an exchange smart contracts. Their balances are kept off-chain in Merkle tree, where they are updated based upon transfer requests and not an actual exchange of assets among user wallets. It is up to each exchange operator to match orders. However, when settlement time comes, the protocol will send a request for a ring settlement to the operator. This involves matching two orders, sending it to him, and then he receives a fee. The request is committed on-chain. Users have the option to withdraw funds at any moment. If withdrawal requests are not processed within a certain time, the protocol will go into an irreversible withdrawal mode. This allows only withdrawal functionality.

Audits

Security Audit

Date November 2019,

SECBIT audited Loopring v3 contracts and found no critical vulnerabilities.

Governance

Information Key

Governance Type Coming Soon

The Loopring Foundation was given the task of managing the protocol. However, they intend to delegate control in time. Although a Loopring DAO was discussed, no details have been given.