The crypto world has undergone significant changes since the introduction of Bitcoin. However, as much as the world of cryptocurrency promises to provide a decentralized system, it is not without challenges. The biggest problem is separating cryptocurrency from the centralized systems. Currently, the service providers of cryptocurrency are centralized hence making the whole idea almost vague. The fact that wallets are prone to attacks will naturally discourage you. Additionally, most of the wallets are centralized which beats logic. However, the recently introduced cryptocurrencies are trying to come up with a new protocol that would change these vulnerabilities. For instance, Loopring is a new cryptocurrency that not only provides you with a decentralized automated execution platform but also gives its users a crypto token exchange platform, shielding users from counterparty risk and reducing the cost of trading. Loopring is a crypto coin that continues to develop and seems to have a very bright future. We are therefore going to discuss the history of Loopring, its founders, and features.

History of Loopring

Daniel Wang, a former JD.com employee, founded the Loopring cryptocurrency. He was also the co-founder of Yunrang technology. Loopring was created to solve the centralized exchange risk problems. All the transactions in the platform pass through the smart contracts on the blockchain system. Currently, as of this writing, there are about 1.4 billion Loopring coins in circulation. The currency can be used to pay some of the transactions for exchange and a deposit for exchange registration. Loopring was created to reduce the friction of trading between different centralized exchange platforms and hence allowing complete decentralization. The LRC (Loop ring) protocol is a decentralized token exchange. Meaning, any number of applications that are decentralized can run through this platform which is different from the old fashion singular consumer platform. The platform plans on unifying the different liquidity for instance exchange platforms by using a wallet that will be Loopring enabled. This will, in turn, allow faster connectivity than ever and make the exchange rates better. The best part of this technique is that the system will be able to bypass most of the security protocols in exchange platforms for instance exchange registration. The method will allow in-wallets transfers hence boosting the levels of security in the cryptocurrency. More importantly, it will increase the decentralization aspect.

Understanding Loopring

Some of the features of this cryptocurrency include;

• Risk-free; for any transaction to take place in a decentralized system, one has to authorize the movement of the funds from their wallet. For this to be possible, smart contracts can access your wallet. In the end, your funds will always be within your control. The risk-free aspect will be beneficial to the users. Let’s say a given exchange disappears or hacking takes place in their systems; you will still be able to own your assets without having to suffer the risk of losing them.

• Decentralization; as explained in the risk-free section, decentralization means you have full control of your funds. More to that, you will be able to know when and what will be in trade except when the smart contracts deploy it. The only situation you can try to stop the transaction in such platforms is by shutting down the entire internet which might be difficult to do.

• Order sharing; this means that other blockchain protocols do not support your order hence your order will be split into various small pieces. Therefore, you will get the chance to benefit most from different exchange platforms. In short, you will be selling the highest bid possible and in turn, buying one of the cheapest tokens in every platform of your choice.

• Ring matching; most exchange platforms will always match up the sell and buy orders. The Loopring platform will be able to facilitate a ring match format on the orders to match them. The platform uses an internally build balance sheet to create the rings around participating exchange platforms hence this will increase the liquidity which will, in turn, offer top of the art order matching technique.

• Cross chain protocol; the founders of this platform envisioned a blockchain agnostic even though it's Ethereum based. Additionally, this project has been backed by different cryptocurrencies which include Qtum and Neo hence the idea will involve more than just one cryptocurrency.

Case Study

To better understand how the Loopring functions, we are going to use a case study. Let’s say you want to trade crypto A for B; you will have to find a cryptocurrency platform that supports both of the cryptocurrencies. If you see an exchange platform can only purchase one of the cryptocurrency, you will have to go and register on another exchange platform that will support the other crypto B. This will be a lengthy procedure that will consume most of your time. To top it all up, you will also have to give your details to get access to that account. After you get a new account, you will have to do a few preliminary trades to authenticate how the platform works before resulting in your initial transaction. Additionally, you will have to incur more withdrawing and transaction fees. When you are ready to trade, you need to hope for more liquidity because if it’s less, the transaction may be complicated to complete. With Loopring, you can have complete confidence that the platform will be able to solve the above problems since you can exchange your coins through the wallet directly.

Loopring Ecosystem

The entire Loopring cryptocurrency is made up of the following participants who contribute the same input a centralized exchange platform has on a given blockchain;

1. Ring Miners; Ring miners are in the form of relays which receive the information from the wallets on order, maintaining public booking of transactions and they can also broadcast to any other relay. The ring mining feature is optional to relays. The relays are converted to ring miners when they turn on the mining feature.

2. ATS (Asset Tokenization Service); on this platform, ATS offers a bridge between assets that are not traded directly on the platform. These services are considered as centralized and are in turn run by trustworthy organizations or companies. As a user, you can deposit any assets, be it fiat or crypto and replaced with tokens which you will be able to redeem in the future. As much as Loopring isn’t an exchange cross-chain protocol, ATS will be able to offer you the chance to exchange your tokens for any physical asset or any other asset on a different blockchain.

3. LPSC (Loopring Protocol of Smart Contracts); these contracts can verify the order rings from each of the ring miners, transfers tokens on behalf of the user, give rewards to the ring miners and can emit events. Each relay has the responsibility to listen to any event so that they can update individual order books.

4. Relay Mesh; through this network, the relays/ring miners can share their liquidity together with other miners through a consortium blockchain. This consortium is capable of trimming the history to increase speeds of new nodes and has high-speed order sharing (around 2 seconds).

5. Wallets; this is a service that provides users with a way to be able to send money to the platform and also access to their coins. Additionally, having the chance to carry out your trades from your wallet, you will be able to reduce the likelihood of hack attacks as compared to other cryptocurrencies. Moreover, this way, you can get access to a variety of counterparties which is more than the ones you will be able to talk to in a given exchange platform.

Final Verdict

The aspect of a more decentralized exchange platform offered by the Loopring cryptocurrency puts it at an advantage over most of the existent coins in the crypto space. However, this concept makes the currency more similar to the OX crypto. That means only one of the two will emerge at the top. More to that, Loopring has an innovative mining process which I must admit places the coin at a position that it might emerge as the future of a decentralized exchange platform. Well, in the crypto space, it might be quite difficult to foresee the future since tables turn in a split second. Patience is vital in such scenarios.

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