Cryptocurrencies exchanges are becoming increasingly popular, which brings a stronger demand for different protocols within the blockchain scene. Offering new tools and features, each protocol wants to innovate and make a difference in the way traders look at the market.
Loopring brings a new way of exchanging crypto assets, using a unique and innovative system.
HOW DOES IT WORK?
Loopring works as an open-source and non-custodial protocol build on Ethereum that enables users to trade cryptocurrency assets across exchanges.
Anyone who wants to build a high-throughput orderbook-based exchange will see Loopring as a remarkably interesting option.
Beyond being just another decentralized exchange, it is a well-designed system that expedites decentralized exchange via ring-sharing and order matching.
Another great point about it is that any platform that uses smart contracts can assimilate with Loopring, such as Ethereum, NEO, and Otum.
DIG INTO IT:
Loopring will combine the orders sent to the network and document it, by using the order books of diverse exchanges.
The main concern for the team behind the project was to offer an accessible foundation for the development of decentralized applications, combining cryptocurrency exchange performance.
It does not need the token holders inside the platform to drop or clamp their token in exchanges for trading. Throughout the process, all the tokens remain on the blockchain, located on users’ individual addresses.
UNDERSTANDING THE PROCESS:
Loopring stands out of other protocols because of its unique system of deal-making.
Instead of requiring traders to deposit funds onto the platform before starting the trading process, it allows traders the option of do not make payment of funds into an exchange to begin the “crypto exchange hustle”.
Users here have fulltime privacy, as the funds always remain in their respective wallets and cannot be clamped by orders.
Traders can cancel, trim, or make and increase the orders before it is carried out, which means more freedom of use.
Behind the stage, miners work to sustain trade history and orderbooks, by enumerating the most effective approach to execute received orders.
The Loopring community is also another important aspect, as it commits to work to ensure complete exchange performance. It is governed by the platform smart contracts, which are all auditable. These specific smart contracts supervise ring miners and control all token transactions.
It also has a remarkable wallet service, which enables users to access their tokens and to carry out orders directly on the Loopring network.
ORDER DISTRIBUTION AND RING MATCHING:
First, we must notice the order distribution system used here.
As it is not backed by other protocols, orders may be divided into diverse smaller orders, meaning that users are always able to buy at the most affordable prices and to sell the highest bid across several exchanges.
The Ring Matching system is also another remarkable feature. Usually, exchanges just match up buying and selling orders. Loopring has a different approach, using a ring-based loop to accomplish its orders.
These rings are created based on a sheet (product of internal balance). This way, it automatically increases liquidity and enables a more sophisticated matching order.
CAN I TRUST THE PLATFORM?
First, decentralized exchanges are the safest path to follow these days, especially considering the recurrent financial chaos worldwide amid traditional central banks and financial institutions.
Decentralized exchanges mean that no one can manage what it is being traded or when it is being traded, meaning more freedom for users.
Another good pro-Loopring point is that the assets here never leave the user’s wallets until they have sold them. All smart contracts involved are verified before accessing the wallets, hence user funds are always under their control.
Let us say an exchange vanishes, get hacked or just becomes bankrupt, what happens next? What happens is users still own their assets, which never had left their original place.
Loopring is an open-source and non-custodial Ethereum based protocol that focuses on high-performance orderbook exchanges.
Using a different approach (when compared to other major cryptocurrency exchange platforms), the protocol believes in more operational work, aiming to be functional on any blockchain that supports smart contracts.
Today it works with Ethereum, NEO, and Qotum, planning to spread its exchange power over more cryptocurrency options.