Loopring's cryptocurrency token, known as LRC, is built on the Ethereum blockchain. It serves as the backbone of Loopring, which is an open protocol developed to create decentralized crypto exchanges.
In 2020, the daily trading volume in the cryptocurrency market typically ranged from around $50 million to $200 million. A significant portion of this trading occurred on centralized exchanges, which are online platforms run by private companies that hold users' funds and facilitate trades between buyers and sellers.
These platforms have various drawbacks that are common to all, prompting the emergence of decentralized exchanges (DEXs) aiming to address these issues. However, DEXs are not without their own challenges.
Loopring aims to merge the order matching capabilities of centralized exchanges with the decentralized settlement process on the blockchain to create a system that offers the best of both worlds.
The LRC token was introduced to the public during an Initial Coin Offering (ICO) in August 2017, and the Loopring protocol was officially launched on Ethereum’s mainnet in December 2019.
Who Are the Founders of Loopring?
Daniel Wang, who is the founder and current CEO of Loopring Foundation, oversees the development of the Loopring protocol. He is a software engineer and entrepreneur based in Shanghai, China.
Wang holds a bachelor's degree in computer science from the University of Science and Technology of China and a master's in the same field from Arizona State University.
Before creating Loopring, Wang took on various managerial and executive roles at top tech companies. He was a lead software engineer at Boston Scientific, a senior director at JD.com for engineering, search, recommendation, and ads systems, and a tech lead and senior software engineer at Google.
Additionally, Wang co-founded several companies, including Yunrang (Beijing) Information Technology Ltd. and Coinport Technology Ltd., which specializes in cryptocurrency services.
What Makes Loopring Unique?
Loopring stands out by aiming to integrate features from both centralized and decentralized exchanges to leverage their benefits while minimizing inefficiencies.
Centralized exchanges are currently the dominant players in crypto trading due to their popularity and ease of use. However, they come with certain risks, mainly because they are custodial in nature. By holding users' funds during transactions, these exchanges expose the funds to potential threats like hacking, insider threats, or regulatory crackdowns.
Another significant issue with centralized exchanges is their lack of transparency. Since trades are not settled on the blockchain, they are recorded internally by the exchange, making it possible for the exchange to manipulate prices or misuse user funds.
To counter these drawbacks, a different model has emerged in the form of decentralized exchanges (DEXs). These platforms do not take custody of funds; instead, they directly link buy and sell orders, settling transactions on a public blockchain.
Despite resolving custodial and transparency issues, DEXs face challenges such as lower efficiency compared to their centralized counterparts, due to limited blockchain capabilities and fragmented liquidity.
Loopring's protocol is designed to retain the strengths of DEXs while addressing their inefficiencies with hybrid solutions. By managing orders centrally but settling trades on the blockchain, and enabling up to 16 orders in circular trades rather than just one-to-one pairs, Loopring aims to enhance order execution efficiency and improve DEX liquidity.
How Many Loopring [LRC] Coins Are There in Circulation?
The issuance of LRC tokens is controlled by smart contracts that form the Loopring Protocol.
Earning LRC primarily involves a process called ring mining. To boost the Loopring network's liquidity, orders aren't strictly matched in pairs of two cryptocurrencies. Instead, the protocol can merge up to 16 different cryptocurrency orders into a circular trade, known as an order ring.
Nodes in the Loopring network earn LRC tokens for arranging individual orders into these order rings, maintaining public order books, recording trade history, and sometimes broadcasting orders to other nodes.
How Is the Loopring Network Secured?
Loopring operates on both the Ethereum and Neo blockchains, with plans to extend support to the Qtum blockchain. Each platform has its respective token: LRC and LRN for Ethereum and Neo, while the intended token for Qtum will be called LRQ.
These tokens are secured through the hash functions of their respective blockchain networks: LRC by Ethereum’s Ethash, LRN by Neo’s SHA256 and RIPEMD160, and LRQ by Qtum’s proof-of-stake PoSv3 mechanism.
Where Can You Buy Loopring [LRC]?
You can purchase LRC on a variety of exchanges, with some of the most reputable ones being:
