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Loopring: A Decentralized Token Exchange Protocol

The Loopring whitepaper outlines a protocol for building decentralized exchanges (DEXs) on top of Ethereum using zk-Rollup technology. The protocol aims to solv

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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. Authors: Daniel Wang Publication: Project Whitepaper Publication date: 2018-01-01

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Key findings

  • Introduced ring-matching for increased exchange liquidity.
  • Applied zk-Rollups to achieve high-throughput decentralized trading.
  • Enabled non-custodial, low-cost asset exchange.
  • Separated trade matching from final settlement on the base layer.

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Citation

Daniel Wang (2018). Loopring: A Decentralized Token Exchange Protocol. Project Whitepaper. https://loopring.org/resources/en_whitepaper.pdf
Canonical knowledge ID: research:loopring-a-decentralized-token-exchange-protocol