What is Loopring (LRC)?

Loopring (LRC) is a cryptocurrency that can be categorized as a layer-2 mechanism on the Ethereum network. This open-source verified token went beyond the limits of centralized exchanges by constructing decentralized methods for transactions. It is non-custodial; hence, anyone can build decentralized exchanges within it.

Traders no longer need a custodian or an intermediary to conduct transactions. Moreover, the network is swift, performing transactions faster than Ethereum.

It’s all thanks to launching the decentralized exchange (DEX). A problem may arise if DEXs do not communicate and distribute orders across a vast network. As a result, DEXs are constrained by the underlying blockchain’s scalability and efficiency.

Its relation to the Ethereum blockchain also makes it adopt the security strength of the network. It helps to ensure user access to their assets every time and limits exchange operators to the behaviour permitted by the protocol.

Who Created Loopring (LRC)?

Daniel Wang is the creator of the Loopring platform. Wang earned a Master of Science in Computer Science from Arizona State University. He worked first as a software engineer at Boston Scientific, then as a senior software engineer at Google.

The platform kicked off excellently and raised considerably during its first coin offering. Due to China’s strict rules, it refunded most of the money received from ICO participants. The Loopring Foundation, a Shanghai-based non-profit, spent the balance of the funds on building the protocol.

How Does Loopring (LRC) Work?

Loopring (LRC) delivers a higher speed than typical decentralized exchanges. Speedy transactions are made possible with the presence of “fast lanes.” This technology collects and completes the transactions outside the Ethereum chain; hence, there is no disturbance from Eth. To do this, the Ethereum blockchain uses zkRollups, a Layer-2 scaling solution. It groups transactions off-chain before submitting them as a single transaction.

This strategy reduces the number of transactions Loopring sends to the Ethereum network to be resolved. Hence, it trades quicker and cheaper.

The Ethereum network will also benefit significantly from this method, which is both more efficient and less taxing on the system.

To ensure the accuracy of off-chain transactions, Loopring must give proof of “zero knowledge,” which is what zkRollup calls for. ‘Zero knowledge’ proof is like presenting someone the answer to a computation without exposing the equations needed to arrive at it.

Buying tokens in a trading pair on certain exchanges necessitates selling the tokens in the same trading pair. Only then can the trade proceed.

When many orders are mixed in Loopring, it is called an “order ring” containing 16 orders. Each order can trade tokens independently if there is no opposing order. This technique considerably enhances the market’s ability to uncover and improve prices.

Is Loopring (LRC) a Good Investment?

Loopring provides a way to create decentralized, autonomous cryptocurrency exchanges that can function as well as centralized exchanges. The innovative cryptographic algorithms of zkRollup and the order ring system both improve efficiency and liquidity.

The technology behind this cryptocurrency is 1,000 times more efficient than Ethereum’s, yet it costs only 1/100th as much. Additionally, companies who want to build cryptocurrency exchanges but don’t want the regulatory burden of having control might benefit from utilizing this coin.