Loopring Community Call #1
Loopring Community Calls have returned, now in a new format — LIVE on stage in Discord. Below is a recap of our call from Friday, Oct.27th, 2023.
It was a great turn out from the community — with lots of familiar faces and even more amazing questions!
We lead off the call with myself giving a recap of all of our recent community updates — from the recently released Quarterly Update blog to the Repositioning blog. Be sure to catch up on these blogs first so you can be up-to-date on everything happening in the Loopring ecosystem as well as to better understand the questions and answers below!
We have received a lot of great feedback on our new Multi-Network strategy, and we couldn’t be more excited that the community is as excited as we are about Loopring’s future💙
This recap was then followed up with a bunch of great questions from the community, mainly around expanding around these updates as well as a few tech related questions.
The following is a full recap of all of the questions and answers from the entire session👇
Loopring Community Call #1: Questions + Answers
The questions and answers below are not verbatim — unfortunately due to some technical issues the audio recording was lost — so rather they are taken from notes taken during the call. I have taken the notes and expanded upon them a bit to give the most up-to-date answers possible for the community.
Q#1:
Loopring has a feature in the smart wallet that locks you out (a cool down period) for 24 hours after a couple of failed transactions in a row. Why does Loopring have this and can it be made optional as it can be frustrating for a user if they need to trade and they get locked out for 24 hours.
A#1:
Byron: The reason for this is because whenever a user submits a transaction on Loopring, we submit a meta-transaction through the relayer and Loopring consumes some gas on Ethereum, whether the transaction goes through or fails. So, it’s an anti-spam mechanism, because a malicious user could just submit thousands of failed transactions and drain Loopring relayer resources this way if they wanted to.
That said, we do have some temporary optimizations coming for this as we want to ensure no regular users are affected by this. You’ll see some of these optimizations rolled out soon.
In the future however, this will no longer be an issue because we are working to integrate complete account abstraction within the Loopring Smart Wallet, with ERC4337 upgrades, which means we will no longer have to submit these meta transactions on our end — so we can remove this protection mechanism also.
Q#2:
There were a few questions around if there were any plans to change or update the LRC tokenomics design in the future.
A#2:
Magic: There is nothing set in stone yet, but we are discussing a few different scenarios behind the scenes. As we scale up and bring down transaction fees, the protocol fee becomes less attractive as it is very small, so this may not be the best way to incentivize the ecosystem. We are looking at things like a profit-sharing model, where we can build great products like in the new Loopring Earn DApp, that help users earn good profits and instead charge a small fee on the profit that we are helping users to earn. This could be a more attractive model for everyone in the ecosystem and ensure that everyone benefits from growing the ecosystem.
Byron: I agree with what Magic just said, and to expand on that a bit:
We are always having these discussions behind the scenes on how we can improve the tokenomics and really tie together the entire ecosystem. LRC is at the core of this entire ecosystem and always will be.
The great thing about our new multi-network strategy also is that we are not like other DApps where they are just copy pasting their code on top of other networks — we are actually deploying our protocol on top of all of these networks with the Earn DApp and Smart Wallet on top of our protocol (as a L2 or L3). This means that LRC can remain at the core of our expansion by always being tied to the protocol.
We haven’t finalized anything yet, like Magic mentioned, but there are lots of options we are considering for using LRC tokenomics to tie this all together — for example: because we are deploying the protocol everywhere we go (each new network) we could charge protocol fees on each network (as a L3) and use a portion of these protocol fees to reward LRC stakers. Like Magic mentioned though, there may be better models though as the protocol fees become smaller and smaller. Or it could be hybrid of multiple options.
We could also use the profit model Magic described, where a % of overall profit every month goes back to LRC stakers or is used to burn or re-buy LRC or something alone these lines.
On top of this we can also replicate similar utility incentives — like we’ve done on our L2, but now on each new network for LRC holders, to encourage more accumulation of LRC — like VIP models, and referral models where users get higher or better rewards by holding LRC. Same with vaults, it’s possible to maybe get a slightly higher APY if a user is holding LRC in their wallet (like if they have a VIP status) — and then also fee discounts for using LRC, etc.
This model has been fairly successful already with coins like BNB — after all we want to be the non-custodial, decentralized version of successful exchanges like Binance. We believe this will be the future of crypto, completely self-custodial, so if LRC can follow a similar model with maybe some improvements on our end, and then just focus on bringing on the users to this better alternative, this could be a very good path for LRC and the ecosystem.
Q#3:
There was a general question around partners and what we can speak to about partner updates and if we’re working with any new partners.
A#3:
Byron: This one is one we can’t touch on too much here today unfortunately.
The unique thing about working with partners is that there are a lot of moving pieces and many of these moving pieces, we aren’t in control of so we don’t want to step on anyone’s toes or speak for other teams about things they are developing for Loopring or on Loopring — we also don’t want to ruin any big surprises or announcements for other teams.
But, rest assured, there are lots of cool things being worked on behind the scenes and as soon as we can, we will share more.
Also for new partners — we’re always in lots of talks with new partners — for example some of you have probably seen already publicly on twitter that we’re in talks with Dave Lauer now and his Urvin Finance project, so we’re going to be working on some cool things there that I think the community will be excited about.
And then there are many more in process that we can’t talk about just yet.
One thing you can expect, is that there will be much more on this front now that we are officially going multi-network — because this means that we are now open to working with every major project to do co-marketing and development with them in order to expand our Smart Wallet and our new Loopring Earn DApp on other networks.
We’re in calls almost every day with other projects on this front. So yeah, lots of exciting stuff to share soon.
Blank: Agreed with Byron here that there are lots of exciting things happening behind the scenes. Now a lot more on the DeFi front as that is a big priority of ours with the new Earn DApp, but also with gaming, NFTs and Web3 in general. We’re on calls all the time with lots of exciting projects that want to build on Loopring so stay tuned for more on these as they develop.
Q#4:
Frank from the Loopring Discord hopped on stage next and asked a question around if Loopring wallet addresses were going to be able to remain the same on other networks, or if users will have to set up new wallet addresses on other networks.
A#4:
Magic: For any newer user that has set up a Loopring Smart Wallet recently, all of these newer addresses will be able to persist on other networks.
Back when we first came out with the Loopring Smart Wallet however, we weren’t thinking about a multi-network approach at that point, so we didn’t build the original wallet to support this. Anyone that has an older smart contract address may need to either set up a new wallet address within the app first in order to replicate that address across other networks on Ethereum.
Luckily though, we have developed a way to now set up new addresses within the Loopring Smart Wallet that can be replicated across other Ethereum networks (other L2s), so moving forward this won’t be a problem and all users will be able to have the same address to match across multiple networks.
Q#5:
There was a question around the upcoming Loophead Club, and what the purpose of it is. There was also a related question about what are ways to earn a Loophead.
A#5:
Byron: Basically, stay tuned as this one will be coming out soon, maybe even next week.
The point of this new club is to build some utility into our Loophead NFTs so that not only the owners of these NFTs get more usage and value out of them, but it ends up being a win-win and an overall benefit for the growth of the ecosystem.
The Loophead Club will give members closer access to the team so that they can get early access to some of the products we’re building as well as a look into things we’re thinking about or testing. This also creates a focus group for us to test things with a group of people who have more of a proven vested interest in the ecosystem. This will better help us shape our future decision making by being able to constantly be able to receive valuable feedback from a dedicated group of participants in the ecosystem.
Purchasing your way into the club is just one way to show skin in the game — but it’s definitely not the only way. Anyone in the community who shows dedication to growing the ecosystem has a good chance of being rewarded with one (through our monthly Ambassador program) over time also. Lastly there will be lots of incentivized campaigns and challenges coming up, like our upcoming 12-week challenge, that will reward active users of our products with Loopheads.
All in all, we want all types of dedicated ecosystem members together in this club, and want to make it an overall benefit to the growth of the ecosystem as well as just a cool social club to chat with like-minded people. In the future it could also be your ticket into real-life and virtual reality events.
Q#6:
There was a question about off-ramps. What is the latest on off-ramps, any new developments, integrations or timelines on them?
A#6:
Magic: Our RAMP off-ramp is currently integrated on Ethereum L1. Android users can currently access that by transferring funds to an activated L1 portion of their Loopring Smart Wallet.
BANXA is also currently working on expanding a L2 off-ramp for us. It is currently in beta and only available on the Pro web DApp (loopring.io) because it is currently very limited in regional coverage, but we are hoping to see an expansion of this soon.
With off-ramps though it depends a lot on these third parties and a lot of things are out of our control, like integrations schedules as well as their ability to expand their regional coverage according to regulatory approvals in each country and region.
We are also looking to add other partners like MoonPay, to expand our coverage on Loopring even further.
Byron: As Magic mentioned, off-ramps are really out of our control. Both Ramp and BANXA are working on expanding their solutions with us for full off-ramps, but even when implemented, they depend a lot on regulations and what banks and governments will allow — like if they will allow these providers to operate in each jurisdiction — so off-ramps are a bit touchy.
However — that said — we are also in talks with other providers who have even more regional coverage (MoonPay like Magic mentioned), so it’s really just a matter of timing to get more of these integrated on our end and on their end — and then we should have at least a variety of options for users to try in each of their regions.
BUT, another great thing about our multi-network future is that it is not completely dependant on our network alone for these off-ramps.
Once other networks are implemented, we can quickly and easily plug in their (already integrated) on and off ramps into the smart wallet.
FOR EXAMPLE: If Arbitrum had a better off-ramp that fit your regions coverage, you could use Orbiter to swap your funds over to your Arbitrum account within the Loopring Smart Wallet and then all of a sudden that off ramp becomes available within your wallet and you can withdraw your funds directly that way.
All of that said, this is all hopefully just short term measures though, as crypto expands and eventually one day each and every person gets paid in crypto, spends in crypto, pays their bills in crypto and invests in crypto — there’s no longer going to be a need for on or off-ramps.
Q#7:
There was a question about the newly announced Loopring Smart Wallet browser extension. What are some more details and timelines on this?
A#7:
Magic: We don’t have any exact timelines at this moment, because our plans for the browser extension have recently just changed quite a bit.
Initially our plan was to build out a web-based version of the Smart Wallet, mainly because of concerns about how the extension would clash if users also had the MetaMask browser extension installed. However, due to recent advancements we’ve made, we have now switched our focus to releasing a full-fledged browser extension.
We want to make it very clear though that this is not going to be just a simple browser extension, like the MetaMask extension or others like the GameStop wallet or Coinbase wallet extensions. The reason we haven’t pushed this out yet is because we are building a fully functional wallet extension that will be loaded full of features, similar to the mobile app. We want a user to be able to fully use their computer as a wallet if that is their preference, in every way you can use a mobile app now.
In the Q4 report we should be able to provide a more up-to-date timeline on this development.
Q#8:
There was a question about unwanted NFTs and if there was a plan to help users hide these in the app or discard of them.
A#8:
Magic/Blank: We’ve heard the community on this issue, and it’s something we’ve been discussing already. It’s currently just an issue of prioritization as we have a lot of big, new features pending that need to be finished first before starting work on new things. Rest assured though, we are always gathering feedback from the community and always listening. We will work on a solution for this in the future as soon as we can point some more resources towards it.
Q#9:
There was a question about Loopring funding and runway. What kind of runway does Loopring have to continue development and are there any plans to do more fundraising or change anything else to extend the runway in the future?
A#9:
Byron: I kind of touched on this in an answer in Discord already a couple weeks back, but just to expand a bit more: I would say that for the next at least few years ahead we don’t have concerns about runway — we’ve done a great job of extending our runway by practicing good treasury management over the years — for example, moving some treasury into stablecoins and ETH during bear markets.
For the long term though it’s true that we need to become self sustainable without the need for any external funding.
Many other projects seem to be doing amazing because they have VC funding and new tokens — and don’t get me wrong, this is a great model to bootstrap a new project — but long term, every single project will have to figure out what we have been. Bootstrapping models like inflation token models and VC funding just don’t work in perpetuity. Long term, you need a self sustaining ecosystem.
One day it’s possible that the whole ecosystem can be self sufficient and made up many contributors around the globe that have their own funding + profit models. But until then, the Loopring Foundation is a big piece of the ecosystem and we understand this.
We are working on new tokenomics as discussed in the other question that can become this self sustaining model.
For example, Uniswap just introduced a new front-end fee on their user facing DApp — separate from any protocol fees — that goes straight to the foundation to help fund future development by the team.
This is one approach that could work — a lot of people seem to be in support of a model like this — but it’s just one approach of many.
Another model could be a profit-sharing system (like we discussed in the tokenomics answer) — where we are just focused on building solid new products that help users earn, and then sharing in those profits— to me this seems to be more of a win-win for everyone.
If a user wins profit, Loopring can take a small % for helping them earn it. If they don’t, then there’s no extra flat fee and overall fees can remain small and competitive — not pricing anyone out of trying products or pricing us out of the competition.
It also better aligns incentives and incentivizes us to come up with better vaults, strategies and products that help users earn more money.
A percentage can also go back to the ecosystem, for example to LRC stakers, or to burning LRC or re-purchasing LRC and it can overall be a profit sharing system that is great for the tokenomics and benefits everyone in the ecosystem.
Anyways, it’s just one idea of many — the point is we’ve got time now to test and work these things out and find the best path to set the whole ecosystem up for success and on a sustainable path for the future — I think this is what is super important.
Q#10:
Loop from the Discord community then came up on stage and mentioned how he absolutely loves the new L2 DApp browser, especially the Spiked Rollups game that you can play directly in-app now. He’s been showing it to all of his friends and family and everyone loves it. Question: What is going to be the criteria for getting into this new DApp browser?
A#10:
Byron: Just to quickly clarify, the new DApp browser on L2 is actually giving users access to any L2 DApp that they want access to. All you have to do is type the web address into the browser bar and it should open it up for you within the app, which is super cool. The only thing we have control over, is which apps are featured in suggested tab the DApp browser.
For example, we are working on a better, more optimized version of LooperLands currently (will soon be featured in the DApp browser), but for now any user can access it by going to looperlands.io within the browser.
But Blank can speak more to the criteria and what our plans are for the DApp browser.
Blank: Like B mentioned, we are only curators of the suggested tab within the DApp browser. Another tab that users can actually utilize is the favourites tab within the browser. This one, in the future, will show at the top along with suggested DApps from Loopring so users can always quickly access the DApps they want or use the most.
That said, what we’re looking for in the suggested tab is to work with projects, games, DApps that want to create a highly optimized mobile version of their DApps that functions well within the app. That and connectivity.
If they want to work with us on these two things to make sure the DApp works seamlessly within the Smart Wallet, then we can probably feature them at some point in the future. Preference of course will be given to DApps that are already popular within the community also. If they can show some user adoption first, then they will be much more likely to be featured there in the future.
Q#11:
The next question was about marketing and what exactly our user goals would be for being considered successful. Also, which products we are planning to market — just the new Earn DApp or the Pro DApp also? Another question in the discord was along the same lines, asking what our short to mid term marketing goals were.
A#11:
Byron: For me, it’s not so much measuring a user number and being like, okay now we’re successful, it’s more about getting to a place where our cost to convert eyeballs into users becomes low enough that we can just throw gasoline on the fire and grow rapidly — then there’s no limit to how far we can grow — so for me that’s a better metric to shoot for than just a random round number like 1 million users.
We have an immense total addressable market (or TAM), meaning basically the whole world is potential users of Loopring — money, trading, spending and investing is a very large use case. I don’t think we’ll ever hit a number where we’ll just sit back and relax. We’re all very mission driven and truly want the whole world to experience this freedom and be their own bank.
So to summarize, short/mid term, we are now at the stage where we are going to begin marketing some of our key products and the goals will be to test different marketing channels with different ads / content and bring our user acquisition cost — of converting an eyeball into a user — to a cost that is below the lifetime value of that user.
For example, if we can onboard users to the Loopring Smart Wallet for $10 by doing paid targeted ads on Twitter (for example) and this user brings LTV of more than $10 to Loopring , then this is the metric we are shooting for. We can then throw resources at this and try to onboard as many users as possible in that channel until the metrics no longer make sense — these would be our short-mid term targets.
And to answer about the products: The point of the separation of the products is so that we can market them each in their own ways — with different target markets, different content and different strategies — but we will work on marketing everything that we offer.
Q#12:
Dice from the Loopring community then came up on stage and asked a question about what other community members, like himself, can do to help grow the ecosystem.
A#12:
Byron: First of all, I want to thank the community for already doing such an amazing job of helping to grow this ecosystem. Without a doubt we have one of, if not the best communities in the world. One of the beautiful things about building a global project like Loopring that is truly open for all, is anyone from anywhere can get involved without permission needed.
For anyone that wants to get more involved, my only advice would be to find something that you are truly passionate about already, or skilled in already, or something you want to become skilled in, and then go all-in on that and find a way to use that skill or passion in the best way possible to help grow the ecosystem and awareness of Loopring.
If you’re good at creating, then create things and mint them on Loopring and grow your own community around your art, music or movies! All of this already being done on Loopring but there is always room for much more, we’re all still so early.
If you’re good at business development or sales, then reach out to businesses that could benefit from using Loopring infrastructure or products to help them grow their business and spark up some interest.
If you’re good at developing, then build some cool tools or projects on top of Loopring or using the Loopring products, and share them with the world!
We’re always happy to help wherever we can with anyone from the community that is helping to grow the ecosystem. Just reach out to the team on Discord anytime to see how we can help you.
Q#13:
The final question was about Block Trade. Zain from the Loopring community talked about how he loved the new Block Trade feature, and how he feels it is one of the best products on Loopring and was wondering how we could expand that product to more tokens to bring in a wider audience to use it.
A#13:
Magic: Basically, there are two different approaches we are looking at in order to make this happen.
The first one is to bring on more tokens / pairs through our market making service, which is what we do for our current tokens (LRC, ETH + WBTC — which are swappable with USDC).
The limitation with this is that every new token or pair we bring on, we have to actually hold these coins on-hand and hedge them to make sure we’re not taking on any volatility risk in either direction. In order to hedge, we need there to be large amounts of liquidity available on other avenues (like on Binance, where we source the liquidity for the current pairs, or on other CEXs). So this approach is really only possible for highly liquid / highly traded pairs. But, we are looking at adding some more of these highly liquid tokens to the Block Trade feature in the future.
The second approach is to create a pure peer-to-peer trading mechanism on Loopring. This is another potentially big avenue we are exploring currently.
It would take two users who have interest in the same token pair, but on opposite sides, and would be perfectly happy swapping at the current market price. We can create a peer-to-peer market for lower liquidity coins (or really any coins) that match-makes these users by finding the right quantities to make these swaps happen at the current market rates and completing the swaps from one wallet to the other on Loopring.
That’s a wrap for this Community Call
Thanks again to everyone from the community for coming out and supporting Loopring and the entire ecosystem. Special thanks to our lead community moderator, Helios, for helping to moderate the call as well. Stay tuned to our socials for more community events coming up!
About Loopring
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.
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