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Loopring (LRC): Ethereum solution on the rise

Ethereum has a problem. If it costs nearly $60 to perform simple transactions, then the blockchain falls short of the promise of “banking the unbanked”

By Finst News
• 5 min read
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Loopring (LRC): Ethereum solution on the rise

Ethereum has a problem. If it costs nearly $60 to move simple transactions, then the promise of "banking the unbanked" falls short on a blockchain. Ethereum is only affordable for those who can afford it. If you find gas fees too high, you need to look for alternatives.

One of those alternatives is the DeFi protocol Loopring with its native cryptocurrency LRC - an ERC-20 token that, as a layer-2 solution, enables faster and especially cheaper transactions on the Ethereum network. Loopring also sees itself as the distributor between decentralized exchanges (DEXs) and the Ethereum mainchain; demand seems to be there. The token has been climbing from one all-time high to the next for days.

Loopring gains momentum

From 47 cents to $3.75 in two weeks: Loopring’s performance is impressive. With a 730% rally in 14 days, LRC has surged into the 52nd spot on the list of the largest crypto assets, overtaking promising projects like IOTA (MIOTA) and Decentraland (MANA).

Yet Loopring isn’t new. The token has traded since 2017 and shot up quickly, then faded during the crypto winter. Until recently the token played only a small role, but is coming more into the light as Ethereum’s scaling bottlenecks surface. The rally’s definitive start was on November 3 with the integrated VIP Tier system, which lets LRC holders enjoy lower costs on Loopring L2. As ETH trading volume and LRC deposits rise, token holders can step up to higher VIP levels and significantly reduce costs.

DEX scaling

The Loopring protocol is a layer-2 solution for decentralized exchanges (DEXs) on the Ethereum network. Because Loopring is built on zero-knowledge rollups (zkRollups), a scaling solution that bundles hundreds of off-chain transactions into a single on-chain transaction, it delivers fast and cheap transactions. Through a smart contract managed by the Loopring protocol, transactions are first coordinated off the blockchain and then settled onto the Ethereum network. This rapidly reduces the number of transactions, increases throughput, and lowers costs. According to Loopring, the protocol handles up to 2,025 transactions per second.

Disclaimer: This content is for informational purposes only and does not constitute financial, investment, legal, or tax advice. The information provided may be incomplete, inaccurate, or outdated and should not be relied upon as such. Nothing on this website should be considered a recommendation to buy, sell, or hold any cryptocurrency. Investing in crypto-assets involves risk of loss.