Block Trading is Live: CEX Liquidity Directly from your Self Custodial Wallet on L2
At Loopring, our mission is to enable the world to become their own bank, directly from the safety and security of their self-custodial wallet. You should never have to give up custody of your hard earned assets to a trusted third party.
Today, we’ve taken another big step forward on that mission by introducing access to major CEX liquidity directly from the comfort of Loopring L2 — enjoy the best liquidity in crypto, with low slippage + best price execution, without ever having to risk your funds on a centralized exchange!
We’ve all seen the doom and gloom headlines around crypto over the past years. Centralized exchanges going bankrupt, centralized lending platforms failing, all with customer funds at risk of total loss. Lets remember, this was not true crypto, these were centralization failures. True crypto is just getting started, and at it’s foundation is self-custody.
It’s clear DeFi, with users taking full control of their own funds with self-custody wallets is the future, but the reality is this will be a transition, as a majority of the liquidity and users in crypto are still on CEXs.
Why? Because for the most part, thats where the best price execution is. Nobody wants to pay more than they have to for any of their transactions. But what if you didn’t have to compromise? On Loopring L2, users can now get the best of both worlds, by executing transactions from the same, top liquidity pools, from the comfort of your self-custody wallet directly on L2!
What is Block Trading on Loopring L2?
Our new feature called “Block Trade” utilizes multiple liquidity sources, particularly CEX liquidity, to serve users liquidity while they remaining in control of their own assets.
These swap transactions occur directly between dedicated entities and do not affect existing DEX liquidity or the prices for other users. This process is similar to block trading systems found in traditional stock markets, where large, privately negotiated transactions take place outside of the open market through private purchase agreements.
To better understand this process, let’s introduce a Market Maker (B) with accounts on both Loopring Layer 2 (L2) and a CEX.
Suppose a Loopring user (A) wants to sell LRC tokens for USDC. The process would proceed as follows:
For full details and risk disclosures regarding the ins and outs of this new feature, read the technical blog just released by CEO Steve Guo here.
Who is this for?
This feature is targeted at CEX users who no longer want to risk custody of their funds to a third party (the CEX), and also at DeFi users that would normally have to move large orders back to a CEX in order to fill them and then withdraw back to their self-custodial wallets.
DeFi is new and growing rapidly and we believe this could be the inflection point that drives the majority of crypto users to start taking their funds into their own control and experiences all that crypto really has to offer. There is no longer any excuse to be holding your funds on a centralized exchange!
As new users are onboarded to Loopring L2, we will continue to enable all sorts of other DeFi and earning opportunities for new and existing users to take full control of their assets, slowly bringing new liquidity and capital into the ecosystem for it to stay.
To kick things off, as we beta launch and test this new feature, we are offering only selected trading pairs (ETH, LRC + USDC) , but over time we will expand this to many more pairs.
We are currently exploring the development of several new features, which could potentially offer users the opportunity to lend their funds for yield, utilize margin, and trade a wide variety of pairs through Block Trade directly on Loopring L2. This may include the ability to trade non-Ethereum based tokens such as Bitcoin, Doge, Solana and other digital assets.
Lets get the word out!
We’ve got lots planned to spread the word about this new feature in the coming months but it always helps to get the community behind it as well! Let us know your creative ideas or start spreading the message yourself to users that need to hear this message.
Lets let the world know they no longer have to give up control (and ownership) of their assets to trusted third parties just to get access to the best liquidity in crypto. Do it from the comfort and security of your own self-custodial wallet on Loopring L2!
Loopring is an Ethereum Layer 2 zkRollup protocol for scalable, secure DeFi and NFT applications. Loopring builds non-custodial, high-performance products atop our L2, including the Loopring Wallet — a mobile Ethereum smart wallet, and the Loopring L2 web app — an L2 orderbook and AMM DEX. To learn more, follow us on Medium or see Loopring.org.