What Is Loopring and What’s Driving Its Rise?
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Just wait for Ethereum 2.0, fellow Ethereans may coo as they help you through your points of doubt. “Things will get better soon!” But then you may divert to them and ask, plaintively, “But what about now?”
You would not be alone. The 2.0 upgrade for Ethereum might seem a long way away, but there is help on hand right now. Loopring, a blockchain-based project, has developed a layer 2 or companion system, which is designed to help Ethereum scale, or increase capacity, in advance of its upgrade – by as much as 1,000x, according to the previous head of its business. A blockchain-based project named Loopring has developed a layer 2 or companion system that will help Ethereum scale, or increase capacity, in advance of its upgrade – by 1,000x, according to the previous head of its business. Not only that but the Ethereum protocol’s security is said not to be affected by the scalability improvements as well. Not only that but the Ethereum protocol’s security is said not to be affected by the scalability improvements as well.
What is the Loopring protocol?
Loopring is a program that performs on top of Ethereum’s Blockchain. Loopring is an application that runs on top of Ethereum’s Blockchain. Loopring aims to speed up transactions by processing Ethereum transactions on its own network, thus making the experience of using Ethereum faster. You can think of it as creating an alternative route from the main highway to reduce congestion.
According to Loopring, this allows the protocol to process transactions at a rate approximately 1,000 times faster than Ethereum, with peaks of 2,025 transactions per second. In contrast to Ethereum’s sky-high fees, Loopring transactions cost less than a cent. Loopring transactions cost less than a cent compared to Ethereum’s astronomically high fees.
Key features of Loopring
Loopring achieves its high throughput and low cost with a mechanism known as zkRollups. We’ll break that down now.
Zero-knowledge stands for “zero-knowledge proof,” which is a method of processing transactions privately. Using this method, one can prove something is true to another without having to provide any extraneous information about the transaction.
Using zero-knowledge proof, you could know that it is raining today without looking out the window, or prove to a border control agent that you are eligible to enter the country without having to disclose your name and address. For cryptocurrency protocols, zero-knowledge proofs are crucial to avoid excessive information being leaked to third parties or relying on a central organization in case something goes wrong.
The Loopring network is powered by its native utility token named looping (also known by its ticker, LRC).
LRC launched in 2017 and mainly powers Loopring’s decentralized exchange, which launched in February 2020. When utilizing the DEX, you have to pay in LRC each time you process a trade. Precisely 80% of the cash goes to liquidity providers, and the remainder is split between insurers and Loopring’s decentralized autonomous organization (DAO).