Is Loopring (LRC) the new Chainlink?
Ethereum blockchain has birthed smart contracts/DApps with impressive tokenomics. Each introducing flexible functionalities and solutions to blockchain and real world problems. Ethereum smart contracts have unarguably dominated the cryptosphere and their cumulative popularity exceeds ethereum’s. From Augur (REP) to recent smart contracts /DApps, these smart contracts have offered seamless opportunities of blockchain adoption and as a reward for such hard work, these tokens have seen a massive price and value action.
Scarcity breeds value. This is arguably one of the most popular phrase in tokenomics. But utility still comes top. Feasible utility is the major factor in driving value for blockchain projects. Many etherum smart contracts/DApp have done so well in building useful applications on the blockchain, generating and distributing tokens judiciously to preserve value.
Chainlink (Link), the oracle smart contract which connects other smart contracts to real world data continues to run riot as regards adoption and price movement, seeing over 500x uptrend in an adverse weather for other cryptocurrencies and gaining mainstream adoption with notable projects including Google and other smart contracts making use of its service. Major ground-breaking moves!. This leaves most cryptocurrency investor searching for The next Chainlink
Chainlink’s success comes as a result of an impressive tokenomics which includes a globally adopted use case and a flexible functionality. Any project hoping to enjoy similar success must satisfy these criteria. With this in mind, Loopring (LRC) is poised to do another Chainlink in terms of adoption and price movements.
Loopring enables the building of high efficiency decentralized exchanges on the ethereum blockchain. Decentralized exchanges offers the most secured means of trading/exchange in cryptocurrency. Loopring guarantees a 100% ethereum level security as users are able to trade directly from their wallets without having to give up their private keys or tweak their wallet security to trade tokens.
Despite the scalability constraints of the ethereum blockchain, loopring offers a highly scalable and efficient decentralized exchange protocol as exchanges are able to perform thousands of off-chain requests in batches. Performance of the of the the exchange is hence not dependent on the scalability of the parent blockchain (ethereum ).
Loopring is able to do this with the aid of the ZKRollup. ZKRollup scales asset transfer transaction on ethereum blockchain by a huge amount without using layer 2’s that introduce liveness assumptions; this is done by using ZK-SNARKS to mass validate transactions. Transaction validation is hence simplified and facilitated as a huge number of transactions are validated at once.
Using ZK-Rollup, loopring 3.0 can settle up to 16,000 transactions per second, however, the On-Chain Data Availability (OCDA) construction lowers this to about 2,000 trade transactions per second. Addition of the OCDA greatest improves security and guarantees blockchain level security.
Loopring impressively satisfies the utility aspect of tokenomics. With such an adoptable technology, Loopring creates a good use case for its DApp.
Just like chainlink’s oracle services, mainstream adoption of loopring’s technology for setting up high throughput decentralized exchanges. Loopring echange– the first decentralized exchange built on loopring 3.0 already showcases the efficiency of the loopring’s decentralized exchange protocol with swift functionalities offering utility to users and the loopring token (LRC).
As regards token generation and distribution scheme; another important aspect of tokenomics, loopring once again scores an impressive point. Generating LRC is mainly via staking.
Different Users of this technology earns the Loopring token by locking up their tokens for a given amount of time (a minimum of 90 days currently). This applies to owners of decentralized exchanges running on Loopring, traders on the dex and ordinary token holders. Locking up tokens not only enables users earn more loopring tokens, it also allows then person certain activities on the Decentralized Application (DApp)
Loopring DEX owners must stake some LRC for economic security and building their reputation. This mechanism guarantees malicious DEXes have something to lose if they don't follow the protocol rules. One can trust DEXes with more LRC staked. Note: asset security is 100% guaranteed by the protocol (Ethereum + ZKPs); LRC staking is for economic guarantees related to service levels. Source
Loopring token’s circulating supply stands at over 1.3 billion LRC in circulation, in contrast to about 350 million Links in circulation. Unpopular opinions might suggest that this discrepancy in tokens in circulation may affect loopring price, while this might contribute negatively; loopring is still poised for some positive price action as more adoption awaits it impressive decentralized exchange protocol.
Disclaimer: Information above is a product of analysis from current data, it is in no way a financial advice, endeavor to do your own research.