Loopring 2018 Retrospective

As 2018 wraps up, we wanted to take a quick look back to see what we’ve accomplished and what we’ve learned, all to ensure Loopring keeps improving in the years ahead.

It’s been a rollercoaster year for the entire ecosystem. Prices have fallen, innovation has risen, and things are starting to become usable and useful! The one constant has been a lot of amazing teams continuing to #buidl, and we are extremely enthused about the future of blockchain technology, Ethereum community, non-custodial value exchange, and so much more.

The winter may be cold, but the projects and protocols adding real value will come out stronger than ever; most people agree that this shakeout was necessary. It’s hard to believe what has transpired in one short (crypto) year — within the general field, and within Loopring itself.

We want to express our appreciation for our unbelievably supportive community, third-party builders, partners, industry peers, and everyone else that makes this space so special. We’re truly grateful.

R&D

Protocol

In 2018, we deployed Loopring 1.0, 1.5 and 2.0 on Ethereum mainnet. Loopring 1.0 implemented Ring Matching; allowing multiple orders to be stitched together across trading pairs in order rings; Loopring 1.5 introduced Dual Authoring technology to prevent the nefarious front-running problem, and middlemen from stealing orders.

Loopring 2.0 launched recently. Amongst other powerful features making Loopring much more efficient and versatile, we designed an innovative token fee model, and became the first blockchain project to support traders paying fees with any ERC20 token. Loopring users are no longer required to purchase and own LRC first. We hope this flexible fee model will not only reduce friction, but also facilitate integration of Loopring Protocol by third-party decentralized trading platforms that have already issued tokens — and actually help provide more value for their tokens.

Loopring 2.0 also initiates support for the new ERC1400 standard for security tokens on Ethereum. We believe that traditional asset tokenization and new blockchain-native securities are a major trend, with huge opportunities ahead.

Loopring Protocol is based on a core concept of off-chain order sharing and on-chain settlement. We believe that even if blockchain throughput can increase 100 to 1000x, there will still be many advantages to off-chain management and order ring matching.

In 2018, we worked with experts from the University of California, Berkeley and SECBIT Labs to conduct a comprehensive security audit of the code of Loopring 1.5 and 2.0. Berkeley’s 1.5 audit report and SECBIT Lab’s 2.0 audit report are available on our official website. For 2.0, we also spent three months to formalize the contract code (Formal Verification), showing that Loopring has attached great importance to the security of our smart contracts, and the results conclude that the design and implementation of the Loopring Protocol are highly secure.

Protocol token listings

In the past year, Loopring’s token listings have been 100% free. We only required the token code to be open-sourced, bug-free, and comply with the ERC20 standard. Up to now, we have processed 14 batches of token listing requests and supported 195 ERC20 tokens to trade.

Now, in 2.0, Loopring Foundation has completely stepped back from the decision-making power for token listings, and gave this right to the relays and partners in the ecosystem. In other words, the decentralized exchanges integrating Loopring Protocol will have the same absolute decision-making power of their token listing as centralized exchanges; Loopring Foundation is unable to intervene or constrain the commercialization of relays. We believe this design makes the Loopring Protocol more decentralized than competitors.

Expansion and Interoperability

Loopring Protocol is blockchain agnostic, and can be deployed on any blockchain with smart contract capability. In early 2018, we planned to deploy Loopring Protocol on a number of public chains, and we successfully deployed Loopring 1.0 and 1.5 on Qtum and NEO. However, most of the current applications and tokens are still concentrated on one or two public blockchain ecosystems (Ethereum), and we have reconsidered our eagerness to deploy the Loopring Protocol on multiple public blockchains too early — until a thriving token economy may exist atop.

So, in the second half of 2018, we turned our attention to the feasibility of researching cross-chain solutions. In the fourth quarter, we made our goal clearer — instead of separately deploying the protocol on multiple public chains, we will look to cross-chain technologies for token transfer across chains. This makes sense at this time, given the advancement of many interoperability solution. It also removes the need to issue more new tokens, and will allow us to use LRN and/or LRC to support the protocol fee model across chains. We are currently working with third parties to develop the cross-chain technology. Our initial efforts include initiatives such as WBTC and platforms such as Wanchain, with solutions like Polkadot also approaching feasibility.

Open source front-end and back-end solutions

In 2018, we developed many front-end products and reference implementations, including the Loopr and Circulr web wallet, the embeddable H5DEX solution, and the Loopring.js codebase. We also open sourced the code for iOS and Android. In the fourth quarter, we worked with SECBIT to conduct a comprehensive security audit of the wallet code (iOS & Android) and further optimized all the code based on the audit results.

On the back-end, we open sourced the implementation of the relay 1.0 based on the Go language, and cooperated with Up Blockchain to jointly develop a new generation Akka-based ‘Lightcone’ relay. The development of a new generation of relays is in full swing and is the highest priority of our R&D team. In future, Lightcone will open APIs for all ecosystem partners and open source to select deeper partners.

By the end of 2018, we had 77 code repositories on GitHub, most of which were open sourced. The intention of our open source projects and implementations was always to provide a strong starting point for ecosystem partners to build DEXs or incorporate non-custodial trading into their wallets and dApps, and reduce the R&D costs of these ecosystem members. Based on our codebase, Tokenest, UpWallet, and Dolomite and many more projects all significantly reduced their R&D cost and time spent. Compared to other DEX protocols, we believe Loopring has taken on more research responsibilities to help third-party builders. The investment in this area consumes a lot of energy and resources, however, we believe that with the goal of maintaining competitiveness, the spirit of open source is crucial, and we will continue to open up more code and strive to promote the development of the ecosystem.

Information disclosures

Throughout the year, Loopring Foundation has been open to disclose any and all relevant information. We hold ourselves to the highest standards and we do not talk about price; do not manipulate the market; do not engage in false transactions; and do not manufacture or participate in fake endeavours or partnerships.

We have published more than 110 English blog posts and over 100 Chinese blog posts in the past year. Daniel Wang, founder of the Loopring Protocol, also conducted 5 AMA events on Reddit, and answered more than 300 questions about Loopring in the community. We also provide the community with comprehensive bi-weekly updates. We are fully transparent about all token-related information, and have always provided all addresses and release schedules (see bottom of post).

Operations

2018 has been a truly global year for Loopring, and we expect this to continue into the future. While based in China, we have teammates in the US (San Jose & New York), Europe (Belgium), and Canada (Montreal).

Aside from our own global footprint and ambitions, we were fortunate enough throughout 2018 to have worked with a number of global strategic companies, including PwC, Hong Kong blockchain accelerator Loopnest, US DEX platform Dolomite, the University of Berkeley Blockchain Lab, Australia’s YBF Financial Technology Center, and Israel’s QuikNode, among many more. It has shown us how the interest in decentralized technology spans the globe.

We’ve also had the chance to work alongside talented and committed peers. This year, the #DeFi movement grew strong, and Loopring joined the network of decentralized financial projects working to build an open financial system. Loopring is also glad to have peers help provide solutions to some important problems, so we can continue to focus on our strengths: non-custodial trading technology. Such assistance comes in the form of cross-chain capabilities (as mentioned above), side-chain technology, etc., and this will help us make progress in both these areas in 2019. That is one of the most exciting properties of this space: being able to help each other, and compound the value of everyone’s work! And that is also the nature of the DEX alliance initiative, where we hope to support as many projects as possible.

In 2018, Loopring had the opportunity to host and attend conferences, hackathons and meetups all over the world. In the Ethereum world specifically, from ETHSF to Devcon4 in Prague, we’ve witnessed firsthand the excitement that is this ecosystem. We even found one of our amazing teammates as a hackathon winner!

It’s also important to get out of the ‘blockchain-only’ lane every once in a while, and participate in general technology events and conferences, such as Hong Kong Fintech Week.

At the same time, Loopring team has shared and presented the Loopring protocol and blockchain technology in the top universities around the world, including Stanford University, MIT, New York University, Columbia University, Carnegie Mellon University, Boston University, California Institute of Technology, University of Southern California, UCLA, University of Miami, Fordham University, Yonsei University in Korea and Fudan University in China.

On July 7, 2018, we hosted the first “2018 Digital Economy Summit Forum” in Shenzhen.

Community

We are so humbled by our incredible community. Along with our vision of a world where value can flow and be exchanged freely, our community is what makes us excited to improve everyday. Across Twitter, Reddit, Telegram and this blog, we engage with tens of thousands of community members.

We’ve also opened up initiatives to get the community involved, such as bug bounties, rewarding translations, trading competitions, giveaways, and more.

For a glimpse at our local (Chinese) community engagement: we had over 50,000 WeChat members, and broadly have a direct community outreach of 150,000 across platforms. Indirect community outreach is consistently in the million range. We have also started initiatives such as “Plan V” which is a sort of half ambassadorship and half think-tank project with approximately 100 members, and a much larger and distributed reach. Throughout June, we performed a 30-city event, meeting enthusiasts all across China.

Of course, an exciting community development this year was the LRN airdrop (the Loopring protocol token on NEO) which we airdropped to LRC holders and successfully completed.

Token Status

LRC

In 2018, our Ethereum-based LRC token has become more widely available, making it possible to land in the hands of supporters and ecosystem participants who derive utility from it. Although our tech seeks to one day displace centralized exchanges (or, at least a large subset of their use cases!), it is nonetheless important for LRC to be made available on the leading exchanges.

Besides trading platforms, it’s also important to be approachable for users who are first entering the ecosystem from the fiat realm and who are actively trying to learn more about cryptocurrencies. In that regard, we are appreciative to be amongst Coinbase’s next tranche of considered tokens. LRC also launched on other user-friendly platforms with direct fiat connectivity such as Kriptomat.

Approximately 58% of LRC supply is currently circulating. The largest proportion of the non-circulating supply is the 20% lock-up held by the Loopring Foundation, which will only begin being linearly unlocked from the end of 2019 and fully unlocked by 2021: it will vest monthly over two years. However, there is a high probability that this part will continue to remain locked. I think this displays how aligned our incentives are with the community and our stated goals: all Foundation-directed tokens have remain completely locked since our token generation.

The long-term incentive plan (which allowed users to lock up tokens for a return) will begin being unlocked in April of 2019. Before the long-term incentive program is unlocked, we will issue an announcement to help participants maximize or calculate their return and tell everyone how to retrieve their LRC.

The Loopring Foundation will continue to provide funding and incentives to code contributors, community participants and ecosystem partners through the Developer Pool and the Loopring Ecosystem Advancement Fund (LEAF), and may in future transfer even more of the tokens held by the Foundation.

Current LRC token distribution

LRN

LRN is the second token of Loopring Protocol; the utility token of the protocol deployed on NEO. 60% was made available to be airdropped to LRC holders.

In 2018, we dropped 8.85% of LRN supply to LRC holders. As of mid-December 2018, about 8% of LRN are locked in smart contracts for airdrops, because they vest daily over two years. In order to protect the interests of supporters, we also burned 18.6% of the total LRN supply (unclaimed airdrop amount). Even with 30% of LRN sold to private supporters, there’s currently only about 31% of the LRN tokens circulating in the secondary market. In other words, the Foundation distributed 1% of the LRN for developers and community participants, and does not sell any more LRN.

In relation to our above mentioned goal of not deploying Loopring to bespoke blockchains anymore, and instead relying more on cross-chain capability, we have plans for enhancing LRN utility in 2019. This is something we have spent a lot of time thinking about, and are really excited to announce our thoughts and receive community feedback on the redesign. This will play a significant part of our 2019 vision, but given the fluid situation of Protocol 3.0+ (with potential side-chains, cross-chain, etc), the full model is not ready. We will announce further details in our 2019 roadmap on Jan 1st, but discussion will continue throughout the first half of 2019 based on the progress of research and development.

We will also further explain the lock-up and usage plans for the 30% of LRN held by the Foundation. In the short to mid term, there should be no more LRN entering the secondary market.

Current LRN token distribution

2019, here we come

If there is one thing of which we can be certain, it’s that there are no certainties in the blockchain space. Everything moves at warp speed, and teams must (simultaneously) innovate and focus to remain relevant. Our conviction in the future of a tokenized economy has not wavered, and we know that Loopring will be a meaningful component of the value transfer layer. 2018 has been a very strong year for us in terms of R&D, and we have contributed considerably to the decentralized exchange landscape. At the same time, we feel like we are just getting started. 2019 will be a year for real advancement and #buidling, and for showing users the true power of non-custodial and interoperable products beyond buzzwords. Please stay tuned for our 2019 roadmap on Jan 1st, and once again, thanks so much for being with us on this wild ride.

Team Loopring


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