Decentralized exchange solutions will be a major blessing for the cryptocurrency world. Right now, too many people have to rely on centralized services, which carry a lot of risk and inconvenience. Loopring is a new decentralized exchange protocol well worth keeping an eye on. It contains a decentralized automated execution system to protect users from counterparty risk.
Loopring Focuses on Decentralization First and Foremost
One can never have enough decentralized solutions at one’s disposal, and this is especially true in the cryptocurrency world. Although all digital currencies are designed to be decentralized, most of us gladly use centralized platforms to buy, sell, and trade this new form of money. It is the opposite of how things should be evolving. Thankfully, some changes are on the horizon in this regard.
Loopring is a decentralized exchange and open protocol which may herald some interesting changes for the cryptocurrency sector. More specifically, the goal is to shield users from counterparty risks, perform decentralized automatic trades, and reduce the overall cost of buying and selling cryptocurrency. It has all the hallmarks of a big game changer, although it is still too early to tell whether or not it is a feasible concept. Loopring removes a lot of risk factors by not forcing users to send tokens or currencies to a centralized custodial entity.
Instead, all tokens will remain in their blockchain-based addresses and under the control of users themselves. Loopring will also automatically adjust the trading amount at the initial price, allowing users to transfer tokens even after submitting orders. It is an interesting concept which demonstrates why decentralized trading solutions are vital to the cryptocurrency sector. Moreover, with no centralized platform to attack, there will be no DDoS attacks or exchange bankruptcy concerns.
Furthermore, Loopring specializes in order sharing. All orders can be broken up into smaller pieces to identify the best exchange and ideal time to trade each batch. The result is an optimized trading outcome without the need to rely on one single platform. Considering that this protocol can trade across all crypto-token exchanges in the world today, it will be pretty interesting to see how this solution performs in a real-time environment.
Additionally, Loopring uses a technique known as ring-matching. Its automated trading intelligence is capable of interfacing with various exchanges and blockchains. As a result, the protocol should never see any major liquidity issues whatsoever. The protocol is designed to generate liquidity within the platform and spread out orders across multiple exchanges. Plus, the cross-chain aspect of Loopring makes it all the more appealing. All it needs is a blockchain with smart contract support to properly execute.
All things considered, Loopring may have what it takes to make decentralized trading a reality for cryptocurrency enthusiasts. Although it remains to be seen if this will actually happen, one has to admire the idea as a whole. The whitepaper associated with this concept contains a lot more valuable information on how Loopring will work and behave. For now, though, it is unclear if and when any blockchains will integrate this concept.