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– TIMESTAMPS –
2:24 What is Loopring?
6:26 How Loopring Works?
10:42 Loopring DEX
13:18 LRC staking
17:25 LRC tokenomics
19:53 Final Thoughts
⛓️ 🔗 Useful Links 🔗 ⛓️
► The Loopring DEX: https://loopring.io/trade/LRC-USDT
► Loopring trading fees and discounts: https://loopring.io/document/fees
► Loopring liquidity mining incentives and updates: https://medium.com/loopring-protocol
► Loopring staking portal: https://staking.loopring.org/login
► zkRollups explained: https://www.youtube.com/watch?v=WQ97L00_gHI
► Loopring’s Better Than CEX Guarantee (original video): https://youtu.be/FEf6GC5p8hU?t=2403
❓What Is Loopring ❓
Loopring is a protocol used to easily create order book based DEXes on Ethereum. Since its inception in August 2017, the project has had a “keep your head down and work” approach, focusing on development even at the expense of marketing and exposure.
Consequently, Loopring has gained significant traction in recent months as their development focused approach is starting to seriously pay off. Loopring 3.0 can process over 2000 transactions per second at an Ethereum gas cost of less than 1 cent per trade.
Loopring has partnered with the Chainlink Oracle, and their LRC token was recently listed on Binance. LRC can also now be used as collateral in MarkerDAO to issue the DAI stablecoin. Loopring 3.6 which is set to be released by the end of the year will increase token support and user capacity.
🤔 How does Loopring work 🤔
Loopring functions as a second layer to Ethereum. It bundles thousands of transactions into individual blocks using zkRollups and submits the block as a single transaction on the Ethereum blockchain. zkRollups involve zero-knowledge proofs
User data on Loopring DEXes are stored in Merkle Trees which contain details such as wallet addresses, token balances, and active trades. A snapshot of each Merkle Tree is periodically sent to the Ethereum blockchain.
There is no block mining or consensus process on Loopring. All transactions are carried out by a centralized network of Relayer nodes. Transaction speeds on DEXes can be increased by removing On Chain Data Availability, which means that few if any snapshots of the DEX are given to the Ethereum blockchain.
Although anyone can build a DEX on Loopring, the project has not had much luck in convincing large players to do so. As such, Loopring created its own Loopring DEX which recently surpassed 6000 users. No KYC/AML documentation is required to use the Loopring DEX, just a Web 3.0 wallet such as Metamask.
Trading fees on Loopring vary depending on the trading pair and staking bonuses but are always 0% for market makers. Different DEXes on Loopring can also offer different trading fees and trading pairs.
There are currently 40 trading pairs on Loopring, all of which are against a stablecoin such as USDT. Gas costs for trading are less than a cent but are standard for withdrawals and deposits to the Loorping blockchain.
Loopring’s LRC token can be staked in three ways: to run a DEX, to lower fees, or to get a cut of all trading fees incurred by DEXes built on the Loopring protocol. It costs anywhere between 50 to 200 thousand USD worth of LRC to run a DEX depending on whether On Chain Data Availability is on or off.
It costs over 700 thousand USD worth of LRC to lower DEX fees to 0.025% for takers. This can be staked by either traders or DEX providers, the latter which sees a 2x multiplier on existing stake if they stake towards reducing DEX fees. Anyone can stake LRC to earn a 70% cut of all trading fees on Loopring.
The LRC token has a maximum supply just short of 1.4 billion. It is deflationary since it is burned as a portion of Loopring DEX trading fees or whenever a DEX operator gets slashed. 50% of LRC’s total supply was sold during its August 2017 ICO at a price of roughly 7 cents per LRC
This ICO appears to have been fairly equitable, with nearly 1300 unique Ethereum addresses participating. Institutional investors also accounted for only about 10% of the funds invested.
📜 Disclaimer 📜
The information contained herein is for informational purposes only. Nothing herein shall be construed to be financial legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Trading cryptocurrencies poses considerable risk of loss. The speaker does not guarantee any particular outcome.
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