- Loopring is an Ethereum blockchain-based protocol (Layer 1) that aims to enhance the Ethereum experience by implementing its elements.
- Developers claim a throughput of approximately 2025 transactions per second (TPS) and provide low network congestion as well.
Loopring offers very low fees along with near-instant transaction finality, unlike Ethereum’s high transaction fees and slow speed. It supports various cryptocurrencies, including its own cryptocurrency LRC, among other emerging DeFi protocols. Instead of being directly dependent on the Ethereum blockchain, Loopring offers a faster exchange for traders’ settlements.
What is the Loopring Protocol?
Loopring is a decentralized crypto exchange (DEX) that uses an automated execution protocol based on Ethereum. Essentially, it’s a tool that delivers crypto assets without human intervention using smart contract algorithms. This exchange provides liquidity to the selling and buying system and aims to create a best-in-class exchange called zkRollup and payment protocols with global demand.
Currently executing over Ethereum, Neo, and Qtum blockchains, Loopring provides a vital framework for decentralized finance (DeFi). As an open-source and automated execution protocol, it operates on a high-performance, decentralized, and secure system, providing security against frontal, Sybil, distributed, and other frauds and scams.
What is ZK(Zero Knowledge) Rollup?
ZKRollup is an Ethereum scaling tool that provides scalability by moving transactions and computation out of Ethereum’s core network. Security is backed by a proof-of-concept consensus mechanism that validates thousands of transactions using smart contracts on Ethereum’s blockchain.
Loopring’s features and capabilities enable it to perform 100 to 200 times more transactions than Ethereum itself, along with high security and low transaction fees. Miners in this protocol are called ring miners, who, like market makers, receive a percentage commission over each transaction. Due to its ring miners and order system, it is named Loopring.
How Does It Work?
The protocol relies on miners or ring miners who perform necessary task execution. Miners assist in the execution of orders in return for rewards, and they are also reimbursed by traders in the form of fees.
Traders can control a specific order’s required margin, and miners can choose the margin and commission.
Traders can set a maximum limit of LRC (Loopring’s cryptocurrency) to be transferred to miners as rewards.
Advantages of Loopring
Loopring’s benefits can be classified into three aspects:
- Protocol Security
It is backed by zkRollup, Ethereum’s best scalability solution, allowing users to access their digital assets securely.
- Ideal for Business Clients
As an open-source and encrypted Ethereum protocol, it saves time and money in business compliance. Loopring can also be used as a payment function for deposit and withdrawal of Ethereum-based assets.
- High-Speed Record
zkRollup offers a throughput of 2025 transactions per second with negligible transaction fees, making it significantly faster compared to Ethereum alone.
LRC, being a highly volatile currency like any other cryptocurrency, continues to grow and evolve as one of the best solutions on the blockchain. LRC can be accessed from any Ethereum and ERC-20-based wallet. Some cryptocurrency enthusiasts believe that the growth of Ethereum is closely tied to LRC’s price, and they see the future of finance depending on ETH.