It is no news that all over the World today, there are roughly hundreds of cryptocurrency exchanges available for users. While the Blockchain technology may actually be decentralizing the world, there remains one aspect of the dispersed ledger technology community that is in critical need of vital decentralization. This is the cryptocurrency exchanges.
In spite of all these, a new project has been set up to hasten the transformation towards a commonly used decentralized exchange structure and create the monetary system of the future. The major crypto exchanges presently active in the cryptocurrency sector depend on susceptible centralized structures. This leaves them accessible to cyber-attacks and fraudulent activities.
Excitingly, the decentralized exchange technology is currently advancing. Thereby giving traders a form of exchange that is true to the foundational precepts of the blockchain innovation. The project that has been set up is known as the Loopring project. It is an uncommon program in the world of decentralized exchanges.
Instead of creating a specific decentralized exchange solution, the Loopring organization is laboring on the way to the advancement of a system that can be used beyond all exchanges. It can be used to decrease risk, boost liquidity, and build a network that assures the best prices for all traders. Still wondering what the Loopring currency is all about? It will be explained shortly.
What Is The Loopring Cryptocurrency?
Loopring is a decentralized exchange formality and a computerized performance system created on Ethereum. It enables its users to trade assets across exchanges. The loopring cryptocurrency is not just a decentralized exchange. It is a system that expedites decentralized exchanging via ring-sharing and order matching.
The essential thing to note and understand is that Loopring will combine the orders sent to its network and document these orders using the order books of diverse exchanges. All decentralized and centralized exchanges will be able to administer Loopring. It provides exchanges with the connection to cross both blockchain and exchange liquidity.
The Loopring cryptocurrency also provides investors with access to the best prices available on the extensive market. However, Loopring can be referred to as blockchain's agnostic. This means that any platform that makes use of smart contracts such as Neo, Ethereum, Otum, etc. can assimilate with Loopring.
Loopring aims at functioning as an accessible regulated base for the development of decentralized applications that combine cryptocurrency exchange performance. The platform does not need the token holder to drop or clamp their token in exchanges for trading. It means that during the trade process, all the tokens will remain on the blockchain in their individual addresses.
How Does It Work?
When making use of the Loopring cryptocurrency, traders do not have to make down payment of funds into an exchange to start the trading process. With decentralized exchanges such as Ether Delta, IDex, Bitshares, a trader will have to deposit funds onto the platform usually via an Ethereum smart contract. But in the case of Loopring, it is a different ballgame.
The funds always remain in user’s wallets and are never clamped by orders. This enables users to have full privacy over their funds while trading. It enables the traders to cancel, trim, or make an increase to their order before it is carried out.
A trader can also transfer funds from his/her wallet completely after placing an order although this transfer can affect your final order because the protocol’s ring miners would receive an alert directing them to the wallet’s remaining balance before matching orders. The ring miners work to sustain trade history and order books, enumerating the most effective approach to execute received orders.
However, it is an estimated extreme procedure that is conducted off-chain. The ring miners are responsible for order matching, making an effort to fill orders completely or partially at a particular exchange rate or better.
The Loopring community comprises of many diverse components that function together to deliver complete exchange performance. The first component of the Loopring system is a wallet service, which provides users with access to their tokens and enables them to carry out orders on the Loopring network.
The nodes inside the Loopring network are provided with an adjustable pattern of approach to cooperate in network upkeep. The Loopring cryptocurrency merges a relay-mesh network to quicken orders and liquidity distribution. Nodes operating the Loopring relay software combine with the already functioning network and distributes liquidity with other relays over the blockchain.
The Loopring community is governed by Loopring Protocol Smart Contracts, which are publicly auditable. These smart contracts supervise the ring miners and also control all token transactions.
Finally, the asset tokenization services give network participants the power to trade assets that cannot be directly marketed on the Loopring network. These services are originally centralized and are operated by honest companies or organizations.
The Loopring protocol consists of components that allows users to deposit assets and get tokens in return that can be advertised on the Loopring network. Thereby, allowing the emulation of cross-chain trading.
Benefits Of The Loopring Cryptocurrency
Some of its benefits of the Loopring Cryptocurrency include:
⦁ Zero Risk
The true meaning of decentralized trading is that your assets will never leave your wallet until you have really sold them. To enable this, smart contracts will have to be verified to access your wallets.
In return, your funds will always be under your control. This is one of the benefits of loopring because if an exchange vanishes, is hacked or becomes bankrupt and many other reasons, you still own all your assets.
As discussed already above; decentralized exchanges simply mean that no one can manage what is being traded or when it is being traded. Although only the deployed inflexible smart-contracts are excluded.
The only means to halt the trades on those platforms would be to shut down the World Wide Web. This is noticeably the future, and other programs already have working products for this decentralization.
⦁ Order Distribution
This is a large benefit in the sense that, it is not backed by any other protocol. This implies that your order may be divided into diverse smaller orders. It will also get a trader the best price from every active exchange. Essentially, this means you are always buying the most affordable and selling the highest bid across plenty of exchanges.
⦁ Ring Matching
Lots of exchanges simply match up the buying and selling orders. However, Loopring makes use of a ring-based loop to accomplish its orders.
Loopring makes use of an internal balance sheet of all active exchanges to create those rings. It thereby increases the complete liquidity automatically and proffers a highly developed matching order.
⦁ Cross-chain Protocol
The entire protocol is presently being created on the Ethereum network. It is envisioned to comprise of a platform/blockchain agnostic. The project is supported by NEO and Otum. It is however probably expected that it will get to more blockchains than Ethereum.
However, Loopring cryptocurrency has an updated version which is the Loopring cryptocurrency 2.0. It is the new fee model.
The Loopring Cryptocurrency 2.0 New Fee Model
The Loopring 2.0 consists of an upgraded protocol smart contracts and this upgraded version makes its component much more easy to use. It is adjustable and makes room for more powerful matching operations.
An intriguing advancement of the Loopring 2.0 is the reimagining of the protocol fee model. Before the creation of the Loopring 2.0, the platform has been making use of a fee-payment token. This means a user will need Loopring cryptocurrency to pay fees to its community participants for trading. The three main aspects of the Loopring community that are involved in the trade procedures and makes use of loopring cryptocurrency as payment are;
⦁ Relayers (Miners)
Traders create orders in wallets, and this sends them to relays that is the ring miners for order matching. The Loopring protocol is created for the highest elasticity. This implies that a wallet can interact with one or diverse relays. The relays can also interact with each other to distribute liquidity.
Wallets, however, distribute fees with relays as they deem fit, and relays can as well distribute fees with each other. Note that sometimes these roles are definite, but frequently a wallet and relay carry out their functions by a particular entity.
In the former version, a Loopring Cryptocurrency fee provides a miner with a base level of incentive. It also gives them the ability to function in upside if they see any better margins. Best of all, incomes are coordinated with means more savings for a user will come with more income for a miner.
However, the Loopring cryptocurrency 2.0 enables fee payments to be much more flexible. It eliminates the stiffness of demanding a particular fee payment token. It makes sure the token is fancy and gives adequate utility to the network. It remains lease free including all benefits left in-protocol, accumulating to every participant.
Wrapping It Up
Unlike a majority of the cryptocurrencies available, Loopring is a blockchain agnostic protocol, and this means that it can simply be operational on any public blockchain that supports smart contract operations.
Over time, it has been functional on Ethereum, Neo, and Qtum. Plus the Loopring team has strategies for broadening the protocol to every other blockchain shortly.
Author Telegram Username : @Crypto_YD
Author ETH Wallet Address : 0xd982859E2D4E10129Daa230ce7025691cdccc52D