What is The Loopring (LRC)?

Loopring protocol is an open source zkRollup protocol. It is a collection of Ethereum smart contracts and ZK circuits which describe how to build highly-secure, highly-scalable orderbook-based DEXes, AMMs, and payment apps. It was the first rollup protocol deployed on Ethereum, and has led the ecosystem into the era of Layer 2 scaling (L2). The current protocol version, v3.8, is the fifth deployed version (the first three were non-zkRollup). It provides a solution for the most outstanding challenge of all decentralized protocols - performance, or more precisely, much higher performance without a tradeoff in security.

Who Created The Loopring (LRC) ？

The founder and current CEO of Loopring Foundation, which manages the development of Loopring protocol, is Daniel Wang, a software engineer and entrepreneur based in Shanghai, China.
Wang has a bachelor’s degree in computer science from the University of Science and Technology of China, as well as a master’s degree in the same field from Arizona State University.
Prior to starting work on Loopring, Wang has held multiple managerial and executive positions in major tech companies: he was a lead software engineer at the medical device manufacturer Boston Scientific, the senior director of engineering, search, recommendation and ads system at the Chinese e-commerce giant JD.com, as well as a tech lead and senior software engineer at Google.

How Does Loopring (LRC) Work?

Loopring is an innovative decentralized exchange (DEX) that leverages the power of zero-knowledge proofs (ZKPs) to offer users a secure and private trading environment. By employing ZKPs, Loopring enables individuals to validate asset ownership without disclosing any additional details about their holdings. This unique approach establishes Loopring as a highly secure and private alternative to centralized exchanges, ensuring enhanced protection for users' assets and sensitive information.
Loopring's layer 2 solution ensures that users of DeFi no longer have to choose between security and performance. They provide a platform for trading, swapping, liquidity provision, and payments on Ethereum that maintains high levels of security while offering fast transaction speeds and minimal fees.
Loopring's layer 2 solution addresses Ethereum's scalability challenges without compromising security. With significantly higher throughput and lower transaction costs compared to Ethereum, Loopring enables non-custodial exchanges and payment apps to outcompete their centralized counterparts.

Tokenomics

Token Utility

LRC is the Ethereum-based cryptocurrency token of Loopring.The LRC token is used to govern the Loopring decentralized exchange. LRC tokens are issued through smart contracts in the Loopring Protocol. The primary method to earn LRC is ring mining, where up to 16 orders of different cryptocurrencies are combined in circular trades. Nodes on the network receive LRC rewards for creating order rings, maintaining order books and trade history, and broadcasting orders.
LRC tokens have a number of utilities on the Loopring protocol, including:

1. Transaction fees: LRC tokens can be used to pay transaction fees on the Loopring protocol. This makes LRC a more cost-effective way to trade assets than on centralized exchanges.
2. Governance: LRC holders can participate in the governance of the Loopring protocol by voting on proposals that affect the future of the platform. This gives LRC holders a say in how the protocol is developed and managed.
3. Liquidity provision: LRC holders can provide liquidity to the Loopring protocol by staking their tokens. This helps to make the protocol more liquid and efficient, which benefits all users.
4. Rewards:LRC holders can earn rewards by staking their tokens or participating in other activities on the Loopring protocol.

Token Distribution

Total supply: 1,373,873,397 LRC.Whereas in the prior protocol version (v3.1) protocol fees went to LRC stakers who locked up tokens for a minimum of 90 days, the new token model rewards LRC holders who use their assets productively for the good of the platform. LRC will be used to incentivize behavior that helps the entire protocol.Protocol fee distribution is configurable by the forthcoming Loopring DAO, but will initially be distributed to participants in the following manner:

1. 80% to liquidity providers (LPs) on Loopring orderbooks and AMM. At least 50% of this portion goes to LRC related liquidity.
2. 10% to insurers — users who put capital into a safety insurance fund.
3. 10% to Loopring DAO — the DAO decides how to spend these funds: buyback and burn, impermanent loss protection, further liquidity incentives, grants, etc.

These Loopring ecosystem participants collectively act to support and strengthen the Layer-2 network, and for their work, they are rewarded.