Buying Loopring: how to invest in Loopring?

There are currently a few thousand different cryptocurrencies. Most people think of Ripple or Bitcoin, but there are plenty of other projects that have a promising future. One of these projects is Loopring. Are you curious what the Loopring project is about and if it is a currency you should invest in? Read on, this article will tell you all about it!

How to buy Loopring?

It can certainly be interesting to buy Loopring. The cryptocurrency can be used for the exchange of assets between different exchanges. Because the orders from different exchanges are combined, orders can be executed at the best prices.

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What is Loopring – goal of the project

First, let’s take a look at what Loopring actually is. Loopring (LRC) can be classified as an open-source decentralized digital currency protocol with an automated execution system on Ethereum. This sounds a bit complicated, but it means that it was created to allow users to exchange assets between different exchanges.

Loopring is not a decentralized exchange in the original sense of the word, but uses technologies for matching orders and sharing rings. The project aims to bundle orders from as many exchanges as possible. After that, they want to match this bundle of orders with the order books of all exchanges found on the Loopring network.

The unique protocol behind Loopring

Loopring features a unique protocol compared to other projects on the crypto market. This protocol makes it easy to trade ERC20 tokens on the Ethereum blockchain. For example, Loopring enables the exchange of multiple tokens. It also ensures a high degree of liquidity under different conditions on the exchange. This offers benefits to both users and exchanges by reducing the risks involved.

Risks are reduced by using smart contracts and minimizing fees and costs. This enables the creation of more profitable ring matching and order allocation. In addition, it provides enhanced security for online data. Any platform that has implemented smart contracts is eligible for integration within the Loopring network. As you can imagine, this means that the project can grow a lot.

The arrival of Loopring 3.0

Loopring 3.0 is the latest version of the protocol. This version manages to deliver much better performance without compromising on security. It is designed with two main goals in mind: performance and security. This version ensures that users can always withdraw their power if they do not fully trust it. Even in the worst case, users can get their power back right away using Merkle Proofs.

Use of the LRC token

If you invest in Loopring, you choose to buy the LRC token. LRC is the special token traded on the Loopring network. The token is used to distribute a percentage of all fees generated on the network. 70% of the fees are paid to strikers, 20% is used to fund the Loopring DAO and the remaining 10% is written off.

The special LRC token plays an important role for the Loopring reputation system. DEX owners on Loopring are required to use LRC to build their reputation and thus provide more security for all users of the platform. This means that exchanges with bad intentions will lose some of their stakes if they act badly and this provides users with insurance.

Risks of investing in Loopring

There are some risks in investing in Loopring. These risks are the same as for the other types of decentralized exchanges. The most important risk is that governments are not in favour of a decentralized stock exchange. With these exchanges, it is difficult to keep an overview. The lack of a central authority makes it hard for EU member states to tackle money launderers.

There is a risk that governments will therefore decide that trading via the Loopring platform is not allowed. This could certainly have a negative effect on the price of the token. Another risk is that eventually a better exchange will come along that will make Loopring obsolete. Although the chance of this happening is small, you should be aware of this if you want to buy Loopring.

Store the loop ring in a special wallet

After  you have chosen to invest in Loopring you might wonder what you should pay attention to. The first thing we recommend is to transfer your coins to a wallet. This is the only way you’ll be able to keep full control over all your coins. You can choose for different kinds of wallets for storing your coins. A paper wallet can be downloaded via the internet, but this is not very practical.

A software or hardware wallet, on the other hand, is a good option for storing the coins. The hardware wallet is the safest as it is not connected to the internet. These do cost some money. If you do not invest that much, a software wallet is more convenient since you can install it on your computer for free. Regardless of your budget, it is handy not to leave your coins on the exchange. It wouldn’t be the first time an exchange gets hacked.

Conclusion – should you invest in Loopring?

As you could have read in this article, Loopring really is a project with a special vision for the crypto market in general. In case this DEX exchange would be used, it is possible that the price of Loopring would increase considerably. However, the question is whether the team will succeed in doing so. The question if you would be wise to invest in Loopring is really a personal choice to make. Unfortunately, we can’t make it for you, you’ll have to think about it yourself.