What is Loopring?
What is Loopring, and why has the price of its LRC token gone up 900%?
Loopring (LRC) is a protocol for building decentralized exchanges (DEX). It is a layer two solution based on zkRollup that processes transactions outside the Ethereum main chain. Therefore, the main advantage of Loopring is that DEXs developed on top of its protocol offer faster multi-token transactions with low fees for users. In addition, Loopring promises greater security and transparency for DEXs hosted on its platform than most current DEXs.
The price of its cryptocurrency, LRC, has grown 900% in the last month and 160% last week. In the previous 24 hours, its market cap has increased by 50%, and it has broken into the top 50 cryptocurrencies with the largest market cap. As of press time, LRC's share price is $3.57. This is mainly due to rumors associating the platform with the famous game retailer GameStop.
What is Loopring (LRC)
Decentralization of all processes seems to be the future in Web 3.0. However, many decentralized applications still have security problems, vulnerability to hacking, and liquidity. That is why the solution offered by Loopring seems key to the development of decentralized exchanges. According to the platform's whitepaper, Loopring offers a high-performance trading experience, very similar to centralized exchanges, but without relying on a third party for its proper functioning.
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A significant improvement over current decentralized exchanges is the ability for exchange orders to mix and match each other. In addition, Loopring's protocol obviates trade limitations between two pairs of tokens, thereby dramatically improving the liquidity of exchanges. Furthermore, Loopring is independent of a blockchain, which allows it to be implemented on any blockchain that develops intelligent contracts.
Loopring Wallet and Loopring Exchange
Unsurprisingly, besides serving as a protocol for developing decentralized exchanges, Loopring also has its cryptocurrency wallet and exchange. The Loopring Wallet was launched in December 2020 as the first Ethereum smart wallet, with built-in zkRollup scaling. This wallet, available for mobile devices on Google's Play Store, is fully powered by smart contracts. Thanks to this and zkRollup, it has up to 1,000 times higher performance and up to 1,000 times lower fees than wallets residing in Ethereum's first layer.
On the other hand, Loopring Exchange, apart from being a DEX with all the features of the exchanges hosted on Loopring, also works as a payment application. Users can send ETH and ERC20 token transfers to any Ethereum address instantly, cheaply, and securely.
LRC Token
The LRC token, based on the ERC-20, is the utility token of the Loopring network. It currently has a trading volume of over $8.8 billion and a market cap of nearly $5 billion.
As mentioned above, the recent exponential rise in its price is related to a possible alliance with video game retailer GameStop. After nearly going bankrupt and being rescued by a group of investors from the Reddit forum, the gaming company is ready to expand its business model. GameStop is looking for a team of blockchain and NFT experts to build a platform for NFTs and Web 3-based games. In this strategy, the Loopring protocol is rumored to be an essential part of the final product.
The reason behind the latest price spike
Although we may think that the latest rise is thanks to this platform's fundamentals, the volatility added unexpected news. Now that many crypto market participants are more speculative than ever, they are looking for opportunities to drive prices sky-high.
The Loopring cryptocurrency has benefited from this trend after rumors were confirmed that the protocol would be a significant part of GameStop's restructuring plan. Gamestop is currently changing its business direction to expand its business model and justify its $200 stock price. The restructuring is expected to take the company into the NFT market, and Loopring would be an integral part of this end product.
What or who are the ring-miners?
Ring-miners make sure that the orders we place can be filled. In compensation for that work, they can receive LRCs, loopring tokens, or split part of the profit margin by getting a better price than the user requests. For example, if you want to trade 1 ethereum for 10 neo, but the ring-miner finds a better trade that offers 11 neo for 1 ethereum, he will place the order and keep that extra neo that you didn't ask for. He then has the option to either split that profit with you, or he can keep the LRC tokens that were specified in the commission when the order was submitted. This system ensures that miners are paid fairly. Beware, let's not understand miners only as those who mine coins... miners also have the responsibility to confirm transactions on most blockchains, in this case, although the LRC token is not minable, they have the role to find the best deals for users who create orders and thus ensure that everything works efficiently.
What is Loopring's competence?
In the field of decentralized exchanges, there are several cryptos that aim for the same goal, for example, 0x, which I'm sure many of you know, although one of the differences is that the exchanges that 0x can access are established on its own platform, while loopring has more possibilities. Other competitors include Bancor, Blocknet and Kyber Network. Although none of them have the service of ring-miners.