“Crimson packages” are conventional Chinese language money items wrapped in pink envelopes, given on particular events and holidays. To rejoice the Chinese language New Yr, Loopring launched a pink packet operate, permitting customers to to ship Ethereum based mostly digital pink envelopes.
Customers select the kind and amount of token to ship, the variety of recipients, and the kind of token distribution. Launched earlier this month, the characteristic has turn out to be so extensively used that Loopring’s relay has been submerged, forcing all requests offline. The issue was mounted in a couple of hours, due to the centralized means through which the quantities of pink packets are counted by the relay.
The Loopring relay is the entity that performs its zkRollups, the layer 2 expertise that makes the protocol work. It hosts the Merkle tree, creates rollup blocks, generates zkSNARK proof, and so forth. The relay collects charges within the type of LRC, Loopring protocol token. The relay and its dependence on the LRC have been criticized for being too centralized. Many have warned that LRC is over 40% of the Whole Locked-Out Worth (TVL) on Loopring, exposing the community to a single level of failure.
Nevertheless, criticism of centralization doesn’t seem to have affected Loopring’s success in 2021. The change launched the second model of its protocol late final yr and has fully taken it down. to shut Loopring Alternate V1 and the corresponding Relay Service this month.
Across the time the brand new model of Loopring was launched, Ethereum started to expertise a rise in fuel expenses. This has pushed merchants to varied Layer 2 networks in an effort to keep away from climb expenses, with Loopring shortly turning into a preferred possibility. In response to knowledge from CoinGecko, Loopring recorded a 24-hour buying and selling quantity of over $ 21 million on February 25 – nearly 4 occasions the buying and selling quantity recorded on ZKSwap on the identical day.
In response to The information DeFi Pulse, Loopring is the sixth largest decentralized change with $ 185.7 million in Whole Locked Worth (TVL). As of mid-February, DEX recorded greater than $ 245 million in TVL, a 64% enhance because the begin of the month and a 600% enhance because the begin of the yr.
The worth of the Loopring protocol token, LRC, has risen almost 400% because the begin of the yr. Used to incite Stakers LRC, the token obtained a a lot wider utility with the arrival of V2. The brand new token mannequin, the corporate defined, now additionally rewards LRC token holders who use their belongings “productively and for the great of the platform.” Roughly 10% of the protocol price can be distributed to Loopring DAO, permitting its customers to resolve the best way to spend the funds.