The founder of Loopring protocol, Daniel Wang host a Reddit AMA to answer everyone’s questions on Sunday, Oct 7th at 22:00 (EST). In this post, we’ve summed up top 20 upvoted questions with answers for you to review.
1.The market has lost confidence in future blockchain spin-offs after LRN hit the floor with a thud. What steps is the team taking to strengthen LRN project and breathe new life into it? Many of my friends refuse to participate in future Loopring private sales in light of the unfortunate challenges with LRN. I expect much is deferred until Neo 3.0 but in the meantime perhaps some special incentives to LRN holders will spark interest and provide some hope to holders.
Daniel: This is a great question. We have implemented most of the logic in Loopring Protocol on NEO as you can find in our GitHub repository — https://github.com/Loopring/neo-protocol. The most outstanding issue with NEO platform is that the cost (gas assumption) of both deploying the protocol and settlement of even the most straightforward ring of two orders is too high; thus there is no way to put such a protocol into production.
That said, we do have a plan for a new LRX token that will be mapped to current LRN token 1-to-1. This LRX token will be used as fee as well as government token on a Plasma or Pokadot-based Ethereum POS sidechain where the only application is the Loopring DEX Protocol. We imagine all ERC20/ERC777/ERC1400 tokens can be transferred between this Ethereum sidechain and the Ethereum main chain.
It will not happen very soon, however, as we need to wait for a more mature Plasma/Pokadot sidechain technology that supports fungible tokens to emerge.
The other option we have is to choose another platform such as EOS and Cosmos to deploy the Loopring Protocol and map LRN to a new token.
We will finalize and announce the plan for LRN in Q2 2019 after we deploy protocol 2.0, 2.1 (supports decentralized burning of LRC), and 2.2 (supports ERC1400) on Ethereum.
2. May I ask when Loopring Protocol v2 is expected to be released?
Daniel: We have deployed one version on Ethereum mainnet and will continue optimizing and deploying new versions. We have also contracted a third-party to conduct code auditing and formal verification, and we expect both of the auditing and formal verification will be done before 15 Dec. We will deploy two minor versions 2.1 and 2.2 in Q1 2019 to support 1) burning of LRC and non-LRC fees, 2) support 1400 security token, respectively.
3. Will the Loopring Foundation ever bring on a marketing team to help develop a social interest in the project? Please explain.
Daniel: We do have a small marketing team. However, I believe the best marketing strategy is to deliver robust solutions and products that speak. Without a reliable technology, most marketing efforts end up with a pump-and-dump scheme, which is not something we are interested in. As of now we still have considerable challenges regarding the relay implementation. I’d rather spend more money on R&D instead.
4. Can you provide an approximate date that we can expect to see 2.0 implemented live?
Daniel: Dec 15th is our targeted release date with a third-party security auditing report and formal verification results. However, we’ll most likely deploy at least four pre-release versions before Dec 15.
5. Is the ARP airdrop still happening before the next LRN airdrop, can you provide any information to the community about the upcoming ARP airdrop?
Daniel: ARP is not in a good situation regarding pricing. We are considering to airdrop it together with VITE sometime later. If the price drops even further, we may choose not to airdrop it at all.
6. Binance Dex is aiming for a public beta end of this year / early next year. Is Loopring in a way involved in this project? Will Binance use the advantages of the Loopring protocol in their DEX?
Daniel: Not that I know of.
7. In regards to the stellar dex and binance dex, how does loopring plan to compete and or play a role?
Daniel: We have to wait for their whitepapers and source code to understand how their DEXs work. As of now, we focus on delivering our own solutions and products. Loopring’s top priority is still focusing on Ethereum ecosystem.
8. Loopring 1.0 has a problem of market depth, how can fee model in Loopring 2.0 solve this problem?
Daniel: Market making on our own relay is not a priority as of now, especially after this month’s trading competition, we realized there are many critical issues with our current relay (1.0) implementation. We’ll strive to deliver a better relay (the lightcone relay) and make it work with the Protocol 2.0 directly. Market making makes sense only when the relay is robust.
Protocol 2.0’s flexible fee model will encourage independent and anonymous market makers to join us. The most significant advantage of such a flexible fee model is the capability of supporting many more real-world business scenarios, and this capability is even strengthened by the fact that Loopring v2 supports paying fees in any ERC20 tokens. I also like that in v2 the relayers have total control over which tokens to list and which tokens to take as fees.
In v2, an order has the following fee related optional parameters:
You can imagine how many combinations it may have.
9. The fee model in Loopring 2.0 will incentivize market makers by waiving fees for orders, what are the benefits of Loopring 2.0 for common users?
Daniel: For regular users, on the one hand, they do not need to pay trading/matching fees in LRC anymore (although paying in LRC will significantly lower the cost), this will reduce the trading friction and improve user experience; on the other hand, they will have access to differentiated products built on top of Loopring v2.
10. Regarding the Vite Airdrop, if I use different Loopring enabled wallets to complete the trade, are the orders counted together?
11. There is a limited explanation about the voting right on the bi-weekly update, could you please elaborate on the voting right regarding the possession of LRC?
Daniel: In v2, there are more parameters that can be governed by LRC token holders (the governing right of the Loopring specific Ethereum sidechain will be given to the holders of the new LRX token). The details of voting are still undecided, and this will not be implemented before we deliver 2.1 and 2.2. One idea regarding voting is that the more an address trades or matches orders, the more weight it should have. Again, decentralized governance is essential but not a must-to-have feature in early versions of protocol v2. This is because, given the current implementation, relays and wallets already have great flexibility and decision-making power — they no longer need to talk to the Loopring Foundation, at all.
12. Does Loopring and NEO exchange do anything together?
Daniel: I haven’t heard much about NEO exchange. I believe they suffer from the same platform-wise challenges that we do.
13. What kind of future use-cases, besides decentralized exchanges, does the loopring technology/protocol have?
Daniel: Loopring is designed to be a DEX protocol. All it offers is the exchange of values in forms of tokens.
14. Hi Daniel, can you explain to me the following: more and more tokens are swapping to their own mainnet and leaving the initial platform (e.g. Ethereum). What does this mean for the use case of LRC as traiding pair? It can only be used for Ethereum based tokens, right? how does the loopring future look like, it is impossible to make for every token a specific LR* right. thanks
Daniel: To make the overall blockchain ecosystem to prosper, different platforms need to connect to swap assets (not through centralized exchanges though). We will soon see some cross-chain/side-chain technology to emerge in the next couple of years. With such techniques, Loopring will be able to ring-match assets issued on other smart contract platforms as long as they can be converted to ERC20/ERC777/ERC1400 standard and transferred to Ethereum or the Loopring sidechain.
We will try NOT to issue more LR* tokens as possible, we will try to rescue LRN for sure.
15. Are you considering to move to a higher TPS chain such as EOS, or cross-chain like Wanchain for bitcoin integration?
Daniel: We’ll keep an eye on EOS and other emerging platforms, but as of now, Ethereum is still our favorite smart contract platform. A higher level of decentralization and security means more to us than higher TPS.
16. At what stage is SNARK’s implementation? What problems should be solved in Loopring? Standard — anonymity or something else?
Daniel: Privacy is not a priority for Loopring, and nobody is working on SNARKS. Our priorities include 1) supporting flexible fee models and any token as fees, 2) batch settlement of trades, 3) less control, 4) support ERC1400 aka security token, 5) better relay design and implementation, 6) better app user experience, and 7) side-chain/cross-chain settlement.
17. How do you see the future of dex? Now the most popular projects are launching their networks. And trading them with simple smart contracts is no longer possible. Some projects are developing other technologies such as state channels, cross-chain, Airswap and Internet blockchains (Cosmos). Are you going to use any of them in Loopring?
Daniel: Most projects with their very own networks will fail. Loopring will follow the traffic of dApps (or developers), when a smart contract platform becomes more popular and carries a lot of values (tokens), we’ll consider supporting that platform. However, we will be cautious not to make the LRN-like mistake.
18. Hello: I have a few questions regarding this trading competition:
1)When participants buy or sell the token, it is difficult to determine when the order can be filled. Although traders can set the gas fee to the highest level, every trader prefers to trade at a lower cost. Do you have solutions to this problem? I think, when the trader is placing an order, it is more intuitive if you can see how many orders that are waiting to match in the order book. So the trader can modify the trading fees in this situation.
2) In the list of pending orders, the current order is displayed according to the price level. This is the traditional way. Is there any other way to sort the orders?.
3) What is the current logic of the order matching in relay?
4) Regarding P2P orders, if it can support Bitcoin, will the market be more broader?
Daniel: 1) & 2) & 3): Through this trading competition, we realized there are many critical issues with our current relay (1.0) implementation. All three of the questions are related to the current relay (1.0) implementation and design. Fortunately, we have started the development of the lightcone relay. Currently I have delegated the work of Loopring Foundation and some work unrelated to the relay development to other members of the team and decided to focus on solving the relay problems. We hope we can have a v2 available before the end of the year. That said, the implementation of relay is actually very difficult, more difficult than the centralized exchange. From another perspective, once we solve the problem of relay, we will build a huge relative competitive advantage.
4) Of course you are right. Unfortunately, the current cross-chain technology is still immature. We are also evaluating Pokadot and plasma technology. What Loopring 3.0 wants to do is cross-chain trading and the redemption of LRN. However, it cannot be overemphasized that it is very difficult. The time will be long and we may take huge risks.
19. I participated in this trading competition, using upwallet. The app does a great job, but there are still some questions:
1) The list of pending orders was displayed according to the price level, but only the buyer side was updated (a sign indicating that it is currently being matched), the seller side has no sign at all. I wanted to buy LRC, but I was unable to make a deal, but the pending order always existed. This experience was really bad, so the number of my trades was basically based on the sell order.
2) Regarding the trading fees, I think DEX is unfriendly to small orders. I sold 20 LRC in UP Wallet for this transaction and the fee was 14LRC. I believe if there is no bonus, none will use this wallet.
3) Another problem regarding the stability of the relay, I found in the trading competition that many orders were matched in a specific time period and there were basically no transactions at other times. Is it that the relay does not always work?
Daniel: Thanks for your feedback. Wallet design needs continuous improvement, but the most important thing is the issues of a relay. Currently, we focus on solving the problem of relay.
20. Does the loopring team have enough funds to keep on working on the project and host hackathons and such? I read somewhere that some projects are out of funds as the market dropped dramatically and the values of eth they raised dropped too. I know LRC team raised eth before the boom earlier this year, but I just wanted to see how the team is doing. what would happen if loopring team did run out of funds, what would be some of the solutions?
Daniel: Don’t worry, we still have enough funds to keep going. Besides, most of our fulltime employees accept LRC as the payment token.
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