Loopring: A Decentralized Token Exchange Protocol
Daniel Wang
Abstract
The Loopring whitepaper outlines a protocol for building decentralized exchanges (DEXs) on top of Ethereum using zk-Rollup technology. The protocol aims to solve the liquidity fragmentation problem by allowing for 'ring-matching' of orders, which enables the circular trade of multiple tokens (e.g., A to B, B to C, C to A) without requiring direct 1:1 trading pairs for every asset. By off-loading trade matching and order book maintenance to an off-chain network and settling the results on-chain via zero-knowledge proofs, Loopring achieves high throughput and low costs while maintaining the non-custodial security of the Ethereum mainnet. The paper is foundational to the development of order-book style decentralized exchanges, demonstrating how zk-Rollup technology can be applied specifically to financial markets to provide a user experience competitive with centralized alternatives.
Key Findings
- 1Introduced ring-matching for increased exchange liquidity.
- 2Applied zk-Rollups to achieve high-throughput decentralized trading.
- 3Enabled non-custodial, low-cost asset exchange.
- 4Separated trade matching from final settlement on the base layer.
Topics
Citation
BibTeX
@misc{loopringa2018,
title = {Loopring: A Decentralized Token Exchange Protocol},
author = {Daniel Wang},
year = {2018},
howpublished = {\url{https://loopring.org/resources/en_whitepaper.pdf}},
}Knowledge Explorer
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