Last week, Loopring founder and CEO, Daniel Wang, did an AMA with Asia Blockchain Community (ABC) in their community chat. The below are the transcribed questions and answers.
QUESTIONS FROM ABC
If you want to learn about us, please visit https://Loopring.org, you will find a lot of information regarding our technologies, products, and progress.
1) Tell us more about yourself. What you have done before Loopring, your educational background, hobbies, and anything you can share.
I’m Daniel Wang, the CEO of Loopring. I graduated from the University of Science and Technology of China with a major in Computer Science. Later I got a master’s degree in CS from Arizona State University.
I believe technologies will make people’s lives better, and blockchain will radically change the way people and companies organize and collaborate. We hope Loopring can contribute to the blockchain technical stack, which will eventually solve real-world problems.
2) We understand that you studied and worked in the US for quite a long time. How was your life there? How is that experience affected your life, especially your experience in Google?
I had worked for Google for four years as a software engineer and later as a tech lead. I enjoyed my life at Google and learned a lot from my managers and colleagues. The experience had a very profound and positive influence over my career after I left the company, and I have also found role models to look up to and learn from. Now I can be more dedicated, focused, and staunch. Meanwhile, I became more open-minded to new things and ideas, such as Blockchain, Ethereum, and Rollups.
3) How did you get into blockchain? What is your role in Loopring? What excites you most in Loopring?
I bought a few Bitcoin in 2013 and started a crypto exchange in 2014 called Coinport. Coinport offers CEX service as well as a Bitcoin payment processing solution. In 2017, I founded Loopring to build a decentralized, non-custodial exchange protocol on top of Ethereum. At Loopring, my job has always been managing resources and general directions. I also wrote many contract code and am now focusing on the business model and user-facing products.
We are excited about Loopring because we are the first team that had implemented zkRollup on Ethereum, and have proven that this idea is one of the best approaches for scalability without sacrifice in asset security. The next version of the Loopring protocol will be even more ready for production to serve millions of users. We have gained so much experience no only in contract level, but also zkRollup in general and relayer implementation. We firmly believe that zkRollup based fast payment and exchange will prevail soon, and we will see even more rollups become production-ready in the years to come.
4) Tell us more about Loopring, what problems it solves? What is the application scenario? What is your happiest and saddest moment while developing it?
Loopring now focuses on two products. The first one is the Loopring protocol; the second one is the Loopring Wallet.
Loopring protocol is a zkRollup, layer-2 protocol for non-custodial exchange and payments. It scales trade settlements by 1000 times (TPS 2025) and reduces the cost per trade to 300 USD per million trades. For payments, these metrics are even better. Our next version, Loopring 3.6, will be code-complete this month and becoming ready for a third-party audit. We expect 3.6 to be production-ready later this year.
Loopring Wallet is a smart contract-based “smart wallet” app. It provides social recovery, inheritance, quota management, and more functionalities. Most importantly, all these modules are upgradable with user permissions. Loopring Wallet is 100% non-custodial and is designed to provide the most user-friendly experience to end-users. A prototype is available, and we are working very hard on user experience.
5) Tell us about the tokenomics and how individual investors like our community members can participate in and benefit from it?
Our token is a utility token that can be used as follows: 1) staking to get Loopring protocol fees. If you stake LRC for more than 3 months, you will start receiving the Loopring protocol fee, currently 0.06% of the trading volumes on all exchanges built on top of Loopring. 2) staking for exchange. You can also stake to help a Loopring DEX to reduce staking fee so the exchange will get more revenue than otherwise, 3) exchange owner can also stake LRC to build up their reputation, so if they do not follow the protocol rules, some or all their staked LRC will be burned. If you are interested in LRC’s utility design, please visit https://loopring.org/#/lrc.
6) The blockchain and crypto markets have been changing. What do you want to see in the near future for this industry?
I expect zkRollup will become more popular, and more tools/libraries will become available for developers. The current R&D cost for zkRollup is still very high, and the turnaround time is still too long for small teams. There is a lot of room for improvement in both theory and implementation.
From the ecosystem’s perspective, I wish blockchain projects can work even closer. We should be the last type of entities to fall into the anti-globalization pitfall.
7) Share with us an inspiring quote for our readers. Eg “I believe in blockchain, it can change the world.”
“The most expensive thing in the world is trust.”
QUESTIONS ON TWITTER
What is your outlook on the future of #LRC in crypto? What can you do to keep increasing adoption to the whole industry? 🏆
I’m optimistic in Loopring as I’m optimistic in Ethereum and zkRollup. Ethereum has captured most (99+%) of the value of all tokens ever issued on all public blockchains; and zkRollup has proven to be one of the most promising technologies for layer-2 scalability. A common challenge for zkRollup solutions is user education regarding layer-2 accounts and making the cross-layer token transfers even simpler and more straightforward. We need a nice product to offer layer-2 services to end-users where they can enjoy a very good experience without understanding the underlying technology.
With the appearing of many blockchain projects, especially payment project which has the newest technology, scalability, efficiency, even no fee on the transaction. Does #Loopring feel pressure from this on the race of global payment solutions?
I don’t think before zkRollup there are any production-ready scalability solutions for crypto payment processing. Some may argue state channel is a nice solution for payment, but I don’t see it as being ready yet.
In ZKP one of the disadvantages is if the user forgets the password user’s data will be lost forever. How Loopring tackle this in ZKP implementation? 🏆
The statement is incorrect. In a rollup system, there are generally two types of data. The first set of data is very critical for security, as they can be used to restore the layer-two account system, a Merkel tree. Loopring post these data with the corresponding ZK-proof onchain, so they are always publicly available. In other words, if we suddenly stop running our service and become irresponsive, someone with a decent Ethereum dev experience can get this type of data from Ethereum and generate the “Merkel Proofs” to claim deposited tokens.
We refer publishing data onto layer-1 as “on-chain data availability”, or OCDA, that’s what makes zkRollup zkRollup. If you disable OCDA, the technology will become Validium.
The second set of data is more centralized for either display (user experience), or proof generation. Loopring maintains these data in our relayer database. You can use our API to query these data.
There is no password at all in the Loopring protocol or our exchange. As a user, you can authorize with either your Ethereum ECDSA signature (verified by the smart contract) or your layer-2 EdDSA signature (verified in Loopring’s circuits). With Loopring, as long as you have access to your Ethereum private key, you have control over all your assets.
There is no need for KYC in Loopring. How Loopring avoids Anti Elements using Loopring for illegal transactions.
Well, how blockchains handle “illegal transactions”? From the engineering perspective, there is no such thing as “illegal transaction”. A transaction may be a result of illegal behaviors and the transaction may serve as proof for legal purposes…
If you were talking about trades, I guess we can ask the same question to all AMM-based trading protocols/dapps, Uniswap included. In my opinion, exchangeability is a desired feature for all tokens, good or bad. Exchangeability is also logically equivalent to transferability, and almost all tokens are transferrable.
Explain about Loopring Pay.
Loopring Pay is an API service to transfer Ether and ERC20 token among layer-2 accounts. It offers immediate user finality and costs only ~170$ per million transfers. We believe in the near future, Loopring Pay will become an important feature in our smart wallet app to support millions of users without overwhelming Ethereum. Internally we have started to use Loopring Pay to pay our employees on layer-2.
Why is Loopring not involved in marketing activities? Every product needs marketing to reach nook and corner. What’re loopring’s upcoming plans?
Stay tuned, once our smart wallet app is ready, we will make sure more people are aware of it.
Does Loopring pay allow users to make transactions as can be used for shopping as well as credit cards?
Consider Loopring Pay as normal Ethereum transfers, but imagine the gas fee is near zero, and payers/payees don’t have to wait for more than a second. And most importantly, it’s as secure as layer-1 Ethereum transfers. If you put these factors together, that’s Loopring Pay: non-custodial, secure, fast, transparent, anonymous, and cheap.
We need to know how #Loopring Exchange PROJECT differs from all of the other big Exchanges on the market?
Loopring is the very first zkRollup exchange and payment protocol and is still the only zkRollup exchange protocol. It’s the foundation of the Loopring Exchange, a DEX built on top of the protocol. So the answer to your question basically boils down to the following question:
- How are DEXes differs from CEXs? and
- How does zkRollup work?
I believe you can find a lot of related information now.
How #Loopring Protocol provides features of the platform, security aspects, and long term benefits in the current market in all investors?
The first part of the question is really about zkRollup. YouTube is a good source of information in this regard.
I think the second part of the question may relate to the protocol’s value capture. We tried our best to make sure token holders will benefit from all trades on Loopring. For each trade, the taker order will pay 0.06% of the token/ether purchased to a protocol fee vault, and people who have staked LRC will be able to claim the “protocol fees” proportionally.
In the future, we will learn from other products and keep improving our token economic design to make sure value capture will be done better.
From: Ms hate
The KEYS of the REVENUE that will power the platform’s future development and success is COSTUMERS What is your BUSINESS MODEL that highly beneficial for your Costumers in able to generate Revenue?
We are building Loopring as a consumer-oriented internet company. The most important product we will offer is Loopring Wallet, a smart-contract based “smart wallet” that seamlessly integrates with Loopring’s zkRollup layer-2 scalability solutions. The wallet is designed for the general public, while Loopring Exchange will have more features for pro-traders.
Our first goal is user acquisition with the wallet. In the near future, there are various ways we can generate positive cash flow and make reasonable profits.
Loopring has already differed from Centralized Exchanges. But How Loopring is differentiating from other Decentralized Exchanges?
Please see my answer to Tabachichi27’s first question.
Will You Please Explain the Layer-2 Account Keys Concept introduced by Loopring?
The layer-2 account key is an EdDSA key-pair which is more circuit friendly. Off-chain requests in Loopring protocol 3.1 are signed by the user’s EdDSA private key and the signatures are verified in the circuits, not on Ethereum mainnet using the smart contract. We expect users to use off-chain requests are much as possible to avoid consuming layer-1 resources and high transaction costs. But certain requests must be on-chain requests, such as deposit and updating layer-2 account keys.
In Loopring 3.6, our next protocol version, users will also be able to use their Ethereum private keys to sign off-chain requests. The layer-2 account keys will become optional.
Recently Uniswap fully decentralized Exchange on Ethereum. got attacked by “Reentrancy Attack” By the way Loopring is also a Decentralized Exchange runs on Ethereum. How it gives Security from Such Attacks?
We have very thorough non-reentrancy assertions in our code, almost all external functions are non-reentrant.
In terms of security, How does #loopring manage to regulate and handle every individual user from Hacking and Malicious Softwares?
The best a hacker can do is compromising our relayer system and steal funds in our hot wallet. Since we do not take custody of users' funds, all we have in our hot wallet is 10 to 20 Ether that we pay as Ethereum gas fees.
Loopring’s smart contract and circuit code have been audited by SECBIT, you can find the report here: https://github.com/Loopring/protocols/blob/master/packages/loopring_v3/security_audit/LoopringV3_Report_EN.pdf
What difficulties of #Loopring faced or facing to bring partnerships or mass adoption, while blockchain seemed as a scam in the common people? How are you going through this?
From the DEX’s perspective, I believe we need to achieve the following before a massive adoption is possible. 1) asset security (same as layer-1), 2) high throughput, 3) low operational cost, 4) good user experience, 5)cross-chain asset deposits/withdrawals, and 6) anonymous (same as layer-1).
Loopring protocol’s design goals include all the above except cross-chain. User experience is beyond the protocol itself, we are currently working on a smart wallet app, the Loopring Wallet, to provide an easy-to-use wallet for the general public. We hope our wallet will also make it super-easy for users to adopt layer-2 scalability solutions.
Security is a very important issue for users. How does LOOPRING protect user information and ensure asset safety?
This is basically the same question of how zkRollup achieves security and high throughput at the same time :)
Loopring is a protocol for scalable, secure exchanges and payments on Ethereum using zkRollup. You can sign up for our Monthly Update, learn more at Loopring.org, or check out a live exchange at Loopring.io.