Loopring Internship Weekly Report 6/15/18

This week in short

This week has been great for my development and for me to continue to try and have a large impact here at Loopring. Loopring has been showing me more and more why they are truly the best decentralized exchange out there. I started by doing research on other decentralized exchanges to see what they are doing and why they are truly different than what Loopring is doing. The ones I had time to look through extensively were 0x, kyber network, Airswap, and OmiseGo. No, although this is a small list, I believe these really are the main direct competitors to Loopring and it was very helpful for my understanding to research them as I will describe later. Another thing I was tasked to do was to translate the loopring.js 2.0 wiki from Chinese to English. 46 Google doc pages later, I feel as though I now have a better understanding of a lot of the aspects of loopring and its code. Something more exciting that happened was when I received a message on LinkedIn from Travis Teo of Tokenize in Singapore. We are currently setting up a meeting for next week that I am able to do all by myself to prove my worth here. I am hopefully going to come up with some kind of partnership, get either one or both of Loopring's coins listed on their exchange, and maybe help them improve their liquidity. I am very excited for what may come out of this. The last thing I did was to try and get Loopring listed on Poloniex, and hopefully that can pan out well.

Decentralized exchanges distinguishing features

0x

0x is another decentralized exchange open-protocol built on the Ethereum platform, looking to build on more platforms in the future. They are based in California and are more prevalent in the Western hemisphere than Loopring. They are looking to do a lot of similar things as Loopring, mostly trying to make it so anyone can have the tools to make their own decentralized exchange. One difference is that their token is listed as a platform in that it is specifically for use on their platform for paying for fees and such, whereas Loopring focuses on a utility token that will be used as a platform token in the future. The technology behind it uses relayers off-chain for order management just like Loopring, and then the transaction and settlement on-chain, all to reduce costs as well. The order is transferred between a maker and a taker, or the two people that want the specified coins. They are currently looking for a way to solve front-running but currently don’t have a solution in place. The main difference here being that they do not use order rings and match one person selling and buying a coin up with another and that is it. This shows how Loopring has the technological advancement over 0x. Another main difference is that they use what is called point-to-point orders and they say they allow people to send the order data over any good type of communication method including facebook messenger and email. They also utilize a DAO to vote on changes to the smart contract and then replace the current smart contract with a completely new one. Overall, I see Loopring as being the better protocol because of the superior underlying technology and scalability.

Airswap (swap protocol)

Airswap is an established American decentralized built on the swap protocol. Firstly, I see their whitepaper as definitely being superior and I think Loopring has room to grow with how they present their whitepaper. Besides that, the first main difference is the fact that Airswap is not open-protocol, they are simply one decentralized exchange and hope to beat out all other actual exchanges using their technology. With their technology, they are focusing on not using order books, a big difference from 0x and Loopring. They instead use an indexer to match up a buyer and a seller in terms of their set exchange rate off-chain. The buyer and seller then do a negotiation off-chain and determine what the exchange rate will end up being. The transaction is completed on-chain. This apparently prevents front-running from occurring. A problem found with this is that the indexer may not be able to match up a buyer and a seller accurately and it may take extra time. There are no transaction fees in this model because the majority of the process happens off-chain. The user must have some Airswap tokens in order to transact on the site, causing a problem. The funds are also frozen temporarily while transacting, differing from Loopring. Overall, it may be a successful exchange but it won't be able to scale as much as Loopring and be as fast.

Kyber Network

This is a decentralized exchange that focuses on on-chain processes and uses transaction fees to do this. They are currently live and running on Ethereum's blockchain. How it works is a conversion rate is submitted to the network, and then Kyber will get the best conversion rate and submit the transaction and immediately transfer the funds. The main difference in the technology behind it is that it holds a reserve warehouse of tokens in an amount set for good liquidity. They fetch from reserves to get the appropriate exchange rate for the tokens. They are able to work with any tokens or digital assets in the future. Also, all tokens are burned when used as transaction fees so it is upward pressured by design and the supply will go down. They are relying on these reserves to fund all the transfers that will be made on their network. They will in the future allow other reserves to become a part of their network, as private or public reserves. They have customer service through zendesk as well. It doesn’t require someone to make an account for transfers below $3,000. The reserve managers set the conversion rates for the coins and Kyber has checks and limits in place in order to prevent them from making bad rates and throwing off the system. The problems I saw here is poor Ux/Ui, inability to exchange fiat currency, slow order processing, and slow order cancellation causes less mainstream adoption. Falling short of its technical roadmap. Unable to currently onboard reserve managers and they remain the sole reserve. Overall, Kyber has some advantages but I believe the technology really is not there and they need some off-chain components.

OmiseGo

Ethereum payments platform, a decentralized exchange, and a lot of different things. It is for people that don’t want to go to other banks and can’t trust a lot people. They are helping people in southeast asia trade crypto between others. It is wanting to be an overall network that wants to do a lot of things. Omise is a different program and the company behind omise itself, trying to be like stripe and be a payments platform that helps companies accept different types of payments, kind of like a credit card processor. I see them as being less of a threat to Loopring than other protocols because they are not focusing as much on the decentralized exchange. However, I do think it is a good idea for them to be kind of a one stop shop for people who want to live, pay, and trade safely and easily.

Conclusion

It was a great week for my advancement in this company and I am very excited to see what is next for me at Loopring. I believe through looking at other exchanges, I see them as different but I don't see them as better than Loopring. I believe that Loopring has the best technology in the industry and believe they can scale up well and hopefully I can help with that. Till next week.

References Used:

https://medium.com/universablockchain/decentralized-autonomous-organization-what-is-a-dao-company-eb99e472f23e
https://0xproject.com/wiki#List-of-Projects-Using-0x-Protocol
https://0xproject.com/pdfs/0x_white_paper.pdf
https://messari.io/research/profiles/0x(ZRX).pdf
https://swap.tech/whitepaper/
https://medium.com/@jakehallac/deep-dive-on-kyber-network-knc-a-leading-decentralized-exchange-c32e2ba3a02
https://home.kyber.network/assets/KyberNetworkWhitepaper.pdf
https://cryptobriefing.com/kyber-network-ieo-difficulties/
https://cryptobriefing.com/what-is-omisego-introduction-to-omg/
https://blog.altcoin.io/the-evolution-of-atomic-swaps-e33ad3af8818
https://plasma.io/plasma.pdf
https://cdn.omise.co/omg/whitepaper.pdf