Welcome to Loopring

What is this about

This is being written to hopefully address any questions that an individual may have in regard to the world of today’s up and coming financial overhaul with DeFi (Decentralized Finance) and Cryptocurrency. I will end up focusing on the Ethereum blockchain as a whole and dig more specifically into how Loopring, which is built on top of the ETH blockchain functions from a new user’s perspective.

Why bother writing this?

Ultimately, I am writing this so that I can get a better grasp of how this work myself while hopefully bringing sense to others as well. I am by no means a programmer or coder in a technical regard. I want feedback from the public eye to correct me where I am wrong so that I can get a better understanding of this as well as expand the adoption of the idea of DeFi. I don’t plan on going much into DeFi in this article but is an important idea in regard to crypto.

Full Disclosure

I am an Ape from reddit, and I do own both GME and LRC and while of course I would love to have the money to buy a home for myself and my family, I also strongly believe in the ideology of DeFi and crypto. DeFi is what will allow the individual to have control of their assets. I also mention Coinbase a lot through this document as they are the only CEX I use and thus I am most familiar with. Any CEX you use I imagine would operate similarly.

Vocabulary

Within the world of crypto there are many acronyms that to many are completely lost in the sauce. Acronym soups are always staggering and can mean many things in regards to the context of what you are reading. It is imperative that you have at least a basic understanding of the verbiage used throughout this document.

Ethereum

Current State

Ethereum currently computes transactions with Proof of Work (PoW), this requires a lot of computational power on the network. When you are paying gas, you are paying for a CPU cycle on a machine within the network. This price fluctuates wildly depending on the current demand on the network.

Future Plans for Ethereum (aka Eth 2.0, hopefully)

Ethereum is going to move to a proof of stake (PoS) model, where people will stake their own ETH coins for this computation. As this does not require near as much computational power the gas price of each transaction will decline.

Token Standards

There are multiple token standards in use on the Ethereum chain. The main being ERC-20, which are other tokens based on Ethereum (Loopring being one of them). There is also ERC-721 and ERC-1155, which are both NFT standards in use on the Ethereum blockchain. Remember, smart contracts are just code that are run on the Ethereum network.

Loopring

Why hype Loopring, what makes it so special?

Pros and Cons

There are Pros and Cons to using Looping just like anything else in life, let me detail a few here:

Pros

  • Once you are on Layer 2 transactions are nearly instantaneous and extremely cheap compared to L1 and other L2 solutions.
  • You can swap to various other token directly on the Loopring DEX which from my experience has extremely low fees compared to any other solution.
  • Loopring Smart Wallet has additional security features not found in other Crypto Wallets, namely the ability to recover and lock your wallet with guardians.
  • Any improvements in L1 only amplify the benefits of Loopring due to it utilizing zkRollups instead of its own side chain.
  • Privacy, your wallet is not tied to you directly. Unless you’re like me and tie your twitter or other various platforms to your wallet address. Who says this is my only wallet? ;)

Cons

  • If you need to cash out to Fiat from L2 you have to transfer to L1, which can be costly depending on the current L1 network load.
  • Initial on-boarding can be expensive, as well as unlocking the various features within the Loopring Smart Wallet.
  • The counter-factual wallet (talked through below) helps to alleviate this to a degree.

Helpful Links

Don’t trust only me, some random guy on the internet. DYOR (Do your own research), check multiple sources, read content directly from Loopring themselves. This is something important that anyone should do with any piece of information.

Purchasing Loopring

This is the most important part for a new user as there are multiple ways to go about purchasing LRC but depending on what your end goal is can vary slightly on what you may want to do.

Small One-Time Purchases (<$300 USD)

If you are wanting to make a small purchase of LRC and the end goal is to get them directly onto Layer 2 you should use the fiat on-ramp method. This can be done within the Loopring Smart Wallet found under add assets. This can be done with a credit/debit cards and bank transfers; keep in mind that this will vary on country AND the bank you use.

Medium Purchases ($300-$15000)

Layerswap.io is now a GREAT solution for medium sized purchases. The limit of now 5000 LRC at a time is amazing, and as of time of writing (4/1/2022), the fee is ~21 LRC per 5000 transferred. This is significantly cheaper than moving to L2 via the smart wallet; even doing some multiple times. If gas is low it may be cheaper to move to the Loopring wallet and then move them to L2.

Large Purchases (>$15000)

You will want to purchase assets on a CEX like Coinbase, yes you will have to pay two L1 fees. One from Coinbase to your wallet, and another to move them from L1 to L2. Make sure to keep an eye on the gas prices and time it for low gas prices.

How I do it

If you plan to HODL your LRC until it is a DeFacto way to exchange goods and services I would DCA. Purchase small amounts (I.E., $300/m) every so often from a CEX like Coinbase and when it becomes a large amount (I stick with >$1500) I would then transfer it to the Loopring smart wallet. You can still then leave it on L1 and time your L1 to L2 move as well. From my experience transferring from Coinbase is cheap.

Selling Loopring

I hate to tell you the best way to do it but I understand, sometimes you need to have that filthy fiat in your hands to buy a pack of smokes while the world implodes around us. There are future plans to make this process a lot smoother from L2 assets.

Selling to Fiat

Unfortunately, I DO NOT recommend do this now if you plan to withdraw <$300 dollars.

Swapping

This is “selling” your LRC and converting it into another cryptocurrency for a small fee (VERY small fee on Loopring’s DEX). You could swap LRC to a stable coin like USDC, You could do this if you are uncomfortable with the volatility that may currently be happening in the market. Just keep in mind that if LRC price does increase you may have the USDC but you lost the gain from LRC.

Moving Loopring

This will detail the various methods of how to move LRC from one location to another.

Moving from a CEX (Centralized Exchange)

There are two ways to go about this right now, the second method Layerswap being very new. There are plans to increase limits and expand tokens that can be moved directly from CEX to L2.

Traditional Way

This can be quite costly and involves multiple moves, assuming your end goal is to get your assets onto L2. There are going to be two transactions that need to take place.

  1. This fee isn’t too bad as it’s just a typical transfer. It will cost whatever the current gas rate is.
  2. L1 → L2, Within Loopring Smart Wallet
  3. This is the cost of gas + the cost of the swap contract. The best times to do this is typically Sunday nights or Monday mornings.

How to ‘Move’ Assets from L1 → L2 in Looping Smart Wallet

This same method works moving L2 → L1, just press the arrows on step 3. Be wary of the fee associated with the move.

  1. Select ‘Move’
  2. Ensure it says from my Ethereum Account to my Loopring Account
  3. If you select the arrows, it becomes a L2 → L1 transfer.
  4. Put in the amount you would like to move and select next, NOW WAIT!
  5. BEFORE you click confirm you can see what the current fee will be for this transfer.
  6. This fluctuates depending on gas, again you can wait it out and wait for a lower gas price.
  7. If you’re happy with the fee price, click confirm!

New way with Layerswap — 0.15 ETH Limit (Currently)

As of today, January 11th, 2022 you can utilize Layerswap to move assets from a CEX like Coinbase to L2 directly with USDC, ETH, and LRC! Allowing you to skip the expensive L1 to L2 transfer fees. There is currently a limit of 5000 LRC, .15ETH, or 1500 USDC. I recommend just moving LRC and then if you want utilize the Loopring DEX to swap to whichever crypto you want.

Loopring DEX — Loopring — Ethereum Layer2

There are two ways to access Looprings’ DEX. You can access it through their webapp (loopring.io) utilizing a wallet like MetaMask, MetaMask having the ability to access Layer 2 as well. You can also access it directly within your Loopring Wallet on your phone itself however if you want to use it to do serious trading and for things like limit orders let me explain WalletConnect.

WalletConnect

Once you are looking at the Layer 2 application in your browser. Before starting this you should ensure that anything that blocks Ads is disabled.

  1. In the window that pops up, click WalletConnect.
  2. A QR code should show up in the browser, MAKE SURE YOU ARE ON HTTPS://LOOPRING.IO
  3. I also have noticed that it doesn’t always like to pop up the QR code the first time I click on Connect wallet. If you close and reclick connect wallet the QR code then pops up. Also disable AdBlocker if you have one enabled. (I use PiHole on my local network)
  4. In your Loopring Smart Wallet app on your phone, select Scan.
  5. Scan the QR code, your phone will then ask for you to approve this.
  6. Once approved your wallet is connected to the web application, but your wallet is still locked.
  7. Where you previously clicked connect wallet, you should see unlock wallet, click that.
  8. You should have another prompt on your phone, click unlock.
  9. Now you can trade/swap your crypto within the Web App.

Loopring Smart Wallet

Layer 1 (Ethereum Base Layer)

What is Layer 1? This is the bare Ethereum blockchain where everything you do is an expensive gas fee. If you want the full functionality of the Loopring smart wallet than you must pay a few fees for various actions.

  • Layer 1 Wallet Activation

Layer 2 (Loopring via zkRollup)

The Loopring smart wallet allows you to utilize Layer 2 with LRC as well as access to the Loopring DEX from a mobile device. Full functionality of this wallet requires that you have a L1 and L2 account open. If you only want to utilize Layer 2, which is cheaper and can be on ramped directly read about the counter factual wallet below.

AMM Liquidity

If you want to take part in Liquidity your assets MUST belong on Layer 2. What you are doing is providing liquidity from your own market into the Loopring system. This allows your crypto to be used within the Loopring DEX for trades, swaps, etc.

ENS Address — L1 transaction fee

This is a simple name for your wallet. Would you rather memorize seattle.loopring.eth (my ENS address) or 0xec62aaf37b10ad286fc86c3e9b662c75a958b40c?

Guardians — L1 transaction per Guardian

A guardian is a third party that can lock/unlock your wallet address, help recover your wallet, and allow you to spend over your daily quota (daily quota is set by oneself).

Counter Factual Wallet

Create a free (Loopring L2) Counterfactual Wallet (+ stop paying Ethereum gas fees!) [QUICK GUIDE]

Possibilities

Wow great, I have been rambling on this whole time…. so, what can we do as a society with technology like this? There are obviously many other use cases that my tiny smooth brain cannot comprehend.

NFTs

Digital licensing… this is huge. Imagine if you were to purchase something like a Video Game, Song, Audiobook as a platform agnostic NFT. That copy of Assassin’s Creed you bought with LRC and is now tied to your unique wallet could then be tied to your Steam account, PlayStation account, Microsoft account. That single purchase would allow you to play that game on any platform.

BYOB (Be your own Bank)

No, not beer. Ya bunch of alcoholic apes.

FAQs

Crypto Questions

Alright boomer, let’s do this.

Loopring

Loopring it a crypto token on the Ethereum blockchain. It’s own Layer 2 application, the token being LRC.

Loopring Smart Wallet Questions

Most of the questions below have to do with transaction fees. I just want to state that Loopring is actively working on more and more ways to avoid L1 transaction fees at all costs. As time goes on it will only improve. I cannot also state enough how great the community is on the Loopring discord server; if you have a question, ask! You can also open a ticket directly with Loopring here:

Speculation

GameStop

You did not think I would go all this time and no mention how GameStop could play a role in all of this? It is one thing to be a middleman for the purchase of new games but there could be a huge potential for the reselling of existing digital assets; think of it like Amazon versus Ebay. You do not go searching on Amazon for that old collectible that is not manufactured anymore but you can find things like that on Ebay.

Future Features

This is a highly active project. The best way to keep up with this would be to follow the discord server, twitter, website, etc. I will note exciting features coming that will improve the adoption of Loopring for the average person as well as the usability of Loopring itself.

TL DR:

Buy Loopring and HODL, and welcome to the future.

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