What is Loopring (LRC)?

Loopring (LRC) is a layer 2 scaling solution built on the Ethereum blockchain, designed to facilitate decentralized crypto exchanges. It was developed to address the limitations of both centralized and fully decentralized exchanges, aiming to combine the best aspects of each. 

Loopring attempts to create a hybrid solution by blending centralized order matching with decentralized, on-blockchain order settlement. This approach is aimed at enhancing security and efficiency while maintaining a high level of liquidity and faster transactions.

The LRC token was first made available to the public during an Initial Coin Offering (ICO) in August 2017. Loopring’s protocol was deployed on the Ethereum mainnet in December 2019, marking a significant step in its development. The protocol's main goal is to facilitate efficient, secure, and scalable crypto exchanges, leveraging the Ethereum network's robustness while addressing its scalability challenges.

Loopring's initiative represents an innovative approach in the crypto exchange landscape, aiming to offer a balanced solution that combines the reliability of decentralized systems with the efficiency of centralized platforms.

How does LRC work? 

Loopring functions as a layer 2 scaling solution for Ethereum, aiming to enhance transaction speeds and lower costs. Its core technology involves Zero-Knowledge Proofs (ZKPs), specifically zk-SNARKs. Simply said, these ZKPs allow the protocol to bundle multiple transactions together, validate them, and then communicate them to the Ethereum mainnet as a single transaction. This process significantly reduces the amount of data stored on the main blockchain, thus minimizing fees and improving transaction speed. Loopring operates a decentralized exchange (DEX) that provides the functionality of both an automated market maker (AMM) and an order book to facilitate digital asset trading. Loopring's native token, LRC, is used to pay transaction fees, provide liquidity, and participate in governance through its decentralized autonomous organization (DAO).

What makes LRC unique?

Loopring's unique approach lies in its hybrid model that combines the benefits of centralized and decentralized crypto exchanges. By managing orders in a centralized manner but settling trades on-blockchain, Loopring enhances the efficiency of order execution and liquidity of DEXs. 

Additionally, Loopring's use of zk-Rollups technology, which reduces transaction sizes and ensures fast and secure transactions, sets it apart. This technology allows Loopring to offer faster transaction speeds compared to Ethereum, with significantly lower transaction costs. Loopring's focus on building on Ethereum for decentralized finance (DeFi) solutions and non-fungible tokens (NFTs) further contributed to its popularity in the crypto ecosystem. 

The LRC token: Utility & tokenomics

The Loopring (LRC) token is an ERC20 token that runs on the Ethereum blockchain. It plays a central role in the Loopring ecosystem, both in terms of utility and economic design.

LRC Utility

Trading Fee Payment: LRC can be used to pay trading fees on the Loopring (DEX).

Staking Rewards: LRC holders can participate in staking to earn rewards. These rewards are a portion of the Loopring protocol fees. Specifically, a recent addition to the Loopring Earn features includes allocating 45% of Loopring protocol fees as staking rewards. This allocation comes after the approval of a DAO staking proposal, signifying a community-driven approach to staking rewards distribution​​.

Staking Process: To stake LRC, holders can use the Loopring Smart Wallet or the DEX interface on the Loopring website. There's an emphasis on ease of use, allowing LRC holders to stake their tokens without needing to pay gas fees if they're already on the Loopring Layer-2 platform. The tokens need to be staked for at least 90 days to be eligible for rewards, though this period might be subject to future adjustments​​.

LRC Tokenomics

Circulating Supply: As per the latest information, LRC has a circulating supply of approximately 1,366,646,304 coins (as of January, 2024).

Maximum Supply: The maximum supply of LRC is capped at around 1,374,513,896 tokens.

Deflationary Aspect: 10% of the Loopring fee pool is burned, and LRC is also burned in certain other scenarios like DEX operator slashing.

The unique approach of Loopring’s tokenomics lies in its combination of staking rewards and utility within its DEX and wider ecosystem. The token distribution and utility mechanisms are designed to incentivize participation in the network and ensure the smooth functioning and security of the platform.

History of Loopring (LRC)

Loopring (LRC) was founded in 2017 by Daniel Wang, a software engineer with a strong background in tech, including experience at Google. The project initiated with an ICO in August 2017, raising $45 million, but due to regulatory changes in China, most of this funding was returned to participants. The remaining funds were directed towards protocol development by the Loopring Foundation. The protocol evolved significantly over time, with a major upgrade to Loopring 3.0 in December 2019, significantly enhancing its efficiency. This upgrade, along with strategic partnerships and the release of their own decentralized exchange in February 2020, marked key milestones in Loopring's development and commitment to blending the benefits of centralized and decentralized exchange features​.

Price history and performance of Loopring (LRC)

Loopring’s token LRC was launched in October, 2017, with a price of $0.1, at a time when the 2018 bull market was in the making. By January, 2018, LRC reached a peak of $1.4 - a growth of 1400% in only 4 months. What followed was an abrupt descent towards $0.3 in March, and another peak of $1 in May. 

From there, LRC traded down and remained below its initial listing level until the DeFi summer of 2020. Loopring’s specialized DeFi offerings were gaining traction and the asset started consolidating its market trajectory ahead of the 2021 bull market. LRC traded for approx $0.9 in the first leg of the 2021’s bull market, but skyrocketed to its all-time high of $3.4 in November, 2021. Just like in the previous market cycle, the momentum was short lived, followed by a rapid descent and another more moderate peak, before LRC cooled-down on the long run. 

Since June 2022, LRC traded roughly in the range of $0.15 - $0.4. As of January, 2024, LRC is trading for $0.23 - a 230% increase compared to its initial listing price in 2017.

How to buy Loopring (LRC)?

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