Loopring Exchange is a platform built upon the Loopring protocol, the first scalable open-source DEX solution employing the zkRollup technology for the Ethereum network. Loopring helps developers to create highly-efficient, decentralized non-custody cryptocurrency exchanges that don’t use order books. The protocol can handle more than 2,000 transactions per second on the Ethereum network thanks to zkRollup, and a layer2 scalability solution.
Loopring represents a platform enabling its users to trade, grow and store cryptocurrencies. It aims to take a leading place among fintech companies providing such services as trading, banking, investing, and payment tools. At Loopring, users can select an alternative secure gateway, which is a parallel financial system of Ethereum. According to the data given on the official website of the company at the time of writing, Loopring DEX has processed 5.4 billion USD with a total value locked at 169 million USD while the customer base of the platform has exceeded 140,000 users.
Initially, Loopring was an R&D-driven project that tried to solve the problem of scalability. In 2020, the members of the Loopring community turned their attention toward the concept of rollups and layer2 scaling. In this way, a new goal came forward. Loopring decided to acquire a more mainstream usage, at least for Ethereum customers who face the scalability problem and look for other options to maneuver. Gas-free layer2 transactions could solve the problem, so the team members standing behind Loopring thought they could gain higher popularity by supporting such a feature. The decision has proved to be efficient. Since L2 solutions are gradually getting better adoption, developers, infrastructure builders, and common users resort to this option more and more often.
Users of the platform can be sure that nobody can illegally take possession of assets deposited to the Loopring network. It is possible to claim your assets regardless of the circumstances since users can deliver valid Merkle proofs through the data stored on the Ethereum network.
In 2021, the Loopring team focused on the commercialization of the protocol via the suite of various products. Thus in May, the platform launched Loopring Creator Grants to reward content creators promoting its key products, which are Loopring Layer2 Exchange and Loopring Smart Wallet with Social Recovery. Among entities eligible to get a grant from the platform are different people creating YouTube tutorials and guides that help to spur L2 adoption, NFT projects attracting more creators to the L2 NFT ecosystem, and developers creating tools, websites, or apps that help to grow the L2 ecosystem. Besides, in August 2022, the platform introduced DAO voting to make the facility truly decentralized and enable users to vote for various aspects of the platform development.
Looping cooperates with many partners to the advantage of all the interested parties. For instance, in May 2021, Loopring announced a strategic cooperation with OpenOcean, the first blockchain-based aggregator of DeFi and CeFi platforms. As a result of this collaboration, the platform implemented the aggregation protocol application scenario on Ethereum L2. Being the first scenario of this kind, it was devised to provide various benefits to users such as low-cost, fast transactions, low slippage, and zero fees. The Loopring platform initiated a special lucky draw event to celebrate the integration by randomly selecting 200 addresses to reward each of them with 66 LRC.
The Loopring products
In December 2020, the company unveiled an Ethereum zkRollup AMM which helped it to attract many new users. Since many of them adopted L2 technology for the first time, one may say that Loopring has indeed contributed a lot to the popularization of this technology and therefore, to the development of the decentralized finance industry in general. At the same time, the platform released a mobile smart contract wallet for Android and then for iOS-based devices. This wallet comes with the integration of Loopring zkRollup, hence, it is the first wallet with L2 integration on the Ethereum network.
In 2021, the platform released Ethport, a solution that provides a direct interaction of Loopring zkRollup users with Layer1 Dapps through zero-knowledge proofs and batching. It enables cheap and efficient transfers across Layer1 and Layer2 channels. CEX platform can easily employ it since standard Layer1 functionality enables withdrawals to Loopring’s zkRollup platform at the price of Layer2, thus making DEX deposits less expensive. L2 cost saving allows companies to preserve activity, despite huge gas prices on Ethereum. At this, the details of complicated implementation are hidden behind a standard interface facilitating the process for end-users and making it a mutually beneficial situation.
The Loopring fees
Loopring charges a 0.3% AMM fee for swaps. 0.2% (i.e. ⅔ of this sum) is allocated to liquidity providers (LPs) contributing to the relevant pool. As for the remaining 0.1%, it is given to the Loopring relayer. 20% of this amount is distributed as the fee of the Loopring protocol, therefore, the protocol fee from AMM swaps is 0.02%. In this way, LPs earn an additional 0.2% from the protocol fees.
The Loopring team
The founder of the Loopring platform is Daniel Wang, who was taking the position of CEO until 2022. Daniel has accumulated relevant experience working as a research assistant at Arizona State University, a lead software engineer at Boston Scientific, and a tech lead and senior software engineer at Google, where he headed full-time engineers and developers. In addition, he co-founded several companies such as Yunrang (Beijing) Information Technology Ltd. (2010), Coinport Technology Limited (2014), and Taiko Labs, where he works over general-purpose zkRollup layer 2 for Ethereum at the time of writing. In February 2022, Steve Guo who previously worked as CTO of Loopring Protocol, replaced him. Steve graduated from the University of Science and Technology of China. He is a former Intel employee, where he worked as a software engineer and a tech lead.