In the beginning of the month, on Friday 2nd August, we had an AMA session with Loopring Protocol, software for building decentralized exchanges, in our Telegram Chat. Our community was introduced to the project by Loopring Founder Daniel Wang and Matthew Finestone, Business Development Director. Here are the essential points of the session:
Please, welcome Daniel (D), Matthew (M), and the questions from our Telegram chat members (Q).
Q: How was the Loopring concept born and bought from illusion to reality?
D: I used to have a CEX called coinport. So I know all the frustrations a CEX owner has. I wanted to create a solution for myself and ended up with a whitepaper and an ICO. But the latest version is based on Vitalik’s ZK Rollup idea.
Q: What makes Loopring unique for amateur and professional traders?
D: We have been working on Loopring for two years and delivered 3 major versions of the protocol. But we realized the performance is terrible and not ready at all to compete with CEXes. Thanks to ZKP and ZK Rollup, we are a few days away from releasing our most performant version, Loopring 3 beta3. In theory, it can settle up to 300 trades per second with on-chain data-available and 6150 trades per second without. We also offer a lot of other features, and one of them is very essential: users can use their tokens right away after a trade is confirmed by the relayer. we call it apparent user finality. This gives DEXes the same user experience as CEXes in terms of trading. very important for professional traders and market makers.
I also have to mention that we do not have any tradeoff insecurity when we scale our DEX protocol, no (insecure) sidechains are involved. Everything happens on Ethereum mainnet.
Q: How is Loopring different from other projects in the crypto space? & what problems qiibee network intends to solve in terms of achieving mass adoption if in the coming months? What are your short term goals and what are your plans to accomplish those goals?
In the near term, we want to help partners to build DEXes on top of our protocol and enable them to complete with CEXes, we believe the technology is mostly ready.
In the long run, we are interested in even decentralize the relayer infrastructure by providing a dual-blockchain DEX solution which we are still researching and may need a lot of words to explain. Not a sidechain though.
Q: What is the LRC token used for? What gives it value? Why is it necessary and why should one invest in it?
M: LRC is now used as a stackable token. It can be staked by anyone to earn part of the protocol fees on the network, and is also staked by DEXs for extra economic security guarantees. We actually just released this post 2 days ago.
Q: What kind of future use-cases, besides decentralized exchanges, does the Loopring technology/protocol have?
D: Focusing on competing with and replacing CEXes. But we may also work on some other cool stuff, but I cannot tell much now.
Q: What is your Fiscal Policy? Instamines, premines, buying, spending, icing, discounting, and/or burning any tokens?
M: There is a fixed supply of LRC, which were minted during our ICO 2 years ago. From here, there can only ever be deflation, as some are burned as a result of network protocol fees and volume.
Q: How does your roadmap look like for the next 2 years?
D: We honestly don’t know. The crypto space is changing on a daily basis, we have to be nimble, we have to keep learning and adjust our roadmap and schedules. We only have a 6-month roadmap. But we do have long-term vision: high performance trading without any trust.
Q: Can you please highlight more on the decentralization aspect using your technology. Also in the future, is it possible to quantify the level of decentralization and economic incentivization?
D: Loopring is more a “non-custodial centralized exchange protocol”, but we all call it DEX protocol because user asserts are held by the users themselves. In the future, the centralized component, relayer, shall also be decentralized. By then, we will have a more decentralized protocol. As of now, when you look around, all DEXes have centralized components except EtherDelta and the like, but their performance is bad.
Q: Do you have any partnerships with other Projects to focus in the near future? If yes, can you please tell us.
D: Yes we do. We are partnering with WeDEX in China, UpDEX in HongKong, Dolomite in the US, and TokenMarket in EU. But we want to roll up DEXes gradually.
Q: What kind of use cases or challenges does Loopering looking to solve?
D: We still have some challenges: 1) we need to dig into ZKP and implementations, right now we use some open-source libs (libsnark, eth snark, etc), 2) we need to find better ZKP curves and may do recursive verifications, 3) we need to reduce the proof generation cost by another magnitude to stay competitive.
Q: What are you going to do to drive adoption by developers and businesses?
We will have to enable one DEX to have great user experience, liquidity and trading volumes. The current tradign volume on all DEXes combined is still too small. Competing with existing DEXes is never our goal, we want to help get rid of most CEXes.
Q: What kind of measurement you will adopt to increase liquidity on dex built upon Loopring protocol?
We give DEX owners full control, Loopring doesn’t own any part of a DEX. They need to figure out how to do the bootstrap.
Q: Governments across the world start to regulate the trading of cryptocurrencies.
Does Loopring plan to add the functionality of KYC in your smart contract?
M: The option to KYC or not is NOT a Loopring Protocol decision actually. We provide the tech – but an actual DEX product will decide how to run their business in their jurisdiction, and can easily add KYC into it. Or they can choose not to. Completely up them. Dolomite.io, for example, is based in the US, builds atop Loopring, and enforces KYC.
Q: What do you think is the biggest problem Loopring will solve and why is the problem important to solve?
D: Performance and trading finality. This is the most outstanding issues for DEXes. We can proudly claim that our solution works.