Loopring

Loopring is an open-source protocol developed for building high-performance, non-custodial decentralized exchanges (DEXs) and payment systems on the Ethereum blockchain. It was founded in 2017 by Daniel Wang, a software engineer with a notable background that includes roles at Google and JD.com. Wang, who holds a master's degree in computer science from Arizona State University, was motivated by the security risks and inefficiencies of centralized cryptocurrency exchanges. His prior experience includes founding a centralized exchange in 2014, which provided foundational insights for creating a trustless trading system. The Loopring Foundation, a non-profit entity based in Shanghai, manages the protocol's development.

The core of Loopring's offering is its Layer-2 scaling technology, specifically Zero-Knowledge Rollups (zkRollups), which it was the first to deploy on Ethereum. This technology addresses Ethereum's scalability challenges by bundling hundreds of transactions together off-chain and submitting them as a single transaction to the main Ethereum network. This process drastically increases throughput—enabling over 2,000 trades per second—and reduces transaction costs by up to 1,000 times compared to Ethereum's base layer, while still inheriting its robust security. Loopring provides a hybrid model that combines the high performance of centralized exchanges with the security of decentralized ones, allowing users to maintain full custody of their assets throughout the trading process.

The business operates as a foundational protocol, providing open-source infrastructure for developers to build scalable payment applications, NFT marketplaces, and DEXs. After initially struggling to attract third parties, Loopring launched its own products, including the Loopring Exchange in February 2020 and the Loopring Smart Wallet. The Loopring Exchange supports both orderbook and Automated Market Maker (AMM) trading models. Revenue is generated through small protocol fees taken from the transaction fees charged by exchanges built on the protocol. These fees are influenced by trading volume, and a portion is used to incentivize participants in the ecosystem, such as liquidity providers and stakers of its native LRC token. The LRC token is integral to the system; for instance, DEX operators must stake a significant amount of LRC to operate on the network, which ensures they act in good faith.

Keywords: Loopring, Daniel Wang, LRC, zkRollup, Ethereum Layer-2, decentralized exchange, DEX protocol, non-custodial trading, crypto payments, order book, AMM, blockchain scaling, zero-knowledge proofs, DeFi, high-throughput, low fees, crypto asset exchange, NFT marketplace, Loopring Wallet, self-custody, Ethereum security, payment protocol, liquidity provider, token staking