Loopring (LRC)

Decentralized Exchange Protocol

Loopring is an Ethereum-based Layer 2 protocol designed to build decentralized exchanges (DEXs). It allows users to trade cryptocurrencies directly from their wallets without needing to deposit funds into a centralized platform.

Scalability and Speed

Using zkRollup technology, Loopring bundles many transactions off-chain and settles them on Ethereum as a single proof. This reduces transaction costs and increases speed, enabling over 2,000 trades per second.

Lower Fees

By processing trades off-chain and only submitting proofs on-chain, Loopring significantly lowers gas fees compared to trading directly on Ethereum.

Security and Control

Users keep full control of their funds at all times since Loopring is non-custodial. The protocol ensures security by rolling up data onto Ethereum’s mainnet.

Token Utility

The Loopring token (LRC) is used for paying fees, staking by DEX operators, rewarding participants who help match orders, and governance voting within the Loopring ecosystem.

Enhanced Liquidity

Loopring uses a unique order ring mechanism that matches multiple orders in a circular way, improving liquidity and price efficiency on its exchanges.

Ecosystem and Products

Loopring supports building various decentralized finance (DeFi) products, including wallets, payment solutions, and potentially NFT marketplaces, all benefiting from its fast and low-cost Layer 2 infrastructure.

Pros of Loopring

• Layer 2 Scaling: Uses zkRollup technology to process transactions off Ethereum’s main chain, making trades faster and cheaper.
• Non-Custodial: Users keep control of their funds at all times, as assets are locked in smart contracts, not held by the exchange.
• Cross-Chain Compatibility: Supports trading of ERC20-like tokens across multiple blockchains that support smart contracts.
• Hybrid Exchange Model: Combines centralized order matching with decentralized settlement, aiming to offer the best of both worlds.
• Low Fees: Significantly reduces transaction costs compared to trading directly on Ethereum.
• Order Flexibility: Orders can be increased, trimmed, or canceled anytime before execution.
• Strong Community and Development: Active development team and consistent community engagement.

Cons of Loopring

• Partial Centralization: Some parts of the system rely on centralized relayers, which may affect availability if they go offline.
• Liquidity Fragmentation: As a decentralized protocol, liquidity can be less than on large centralized exchanges.
• Complexity for New Users: The hybrid model and use of smart contracts may be harder to understand for beginners.
• Market Volatility: Like many altcoins, Loopring’s token price can be very volatile.
• Withdrawal Delays: In some cases, withdrawing funds can take longer if the operator or relayer is unreachable.

Loopring aims to improve Ethereum trading by making it faster, cheaper, and more secure while keeping users in control of their assets.

Founders

Loopring was founded in 2017 by Daniel Wang and Jay Zhou. Daniel Wang is the main founder and current CEO of the Loopring Foundation.

Background of Daniel Wang

Daniel Wang is a software engineer and entrepreneur based in Shanghai, China. Before Loopring, he founded the crypto-exchange Coinport and worked at companies like Google and JD.com.

Company Information

Loopring Foundation, which manages the development of Loopring, is registered in the British Virgin Islands.

Institutional Investors

Loopring has attracted several institutional investors including Kosmos Ventures, Hash Capital, Fundamental Labs, and Hashchain Capital. These investors have participated in multiple funding rounds supporting Loopring’s development.

Individual Investors

Notable individual investors include Simon Jenson, who has been involved in recent seed funding rounds.

Funding Rounds

Loopring has raised funds over multiple rounds, including a seed round in early 2019. The project has had around 7 to 10 investors involved in these rounds.

Community and Strategic Support

Beyond formal investors, Loopring benefits from a strong community of users and strategists who support its growth and adoption in decentralized finance (DeFi) and NFT spaces.

For more details, visit the official Loopring website: https://loopring.org/

Halal Status of Loopring

• Yes, Loopring is generally considered halal by some Islamic finance perspectives because it operates as a decentralized protocol without involving interest (riba) or gambling elements.
• However, there is no official unanimous ruling from all Islamic scholars specifically on Loopring, so opinions may vary.
• It is recommended to consult a qualified Islamic scholar for personal guidance based on Shariah principles.