The decentralized Loopring exchange is one of several layer two (L2) networks that have seen increased adoption as Ethereum transaction fees continue to rise.
Loopring is a layer two DEX that scales Ethereum transactions using zero-knowledge rollups. With gas prices at exorbitant levels, there has been a surge in usage in recent months. Loopring claims to be able to settle up to 2,025 trades per second at an average transaction cost of 0.15-0.30 percent of what Ethereum L1 charges.
Wu Blockchain, a Chinese media outlet, has noticed a significant increase in Loopring adoption, commenting:
The total trading volume recently surpassed $3 billion. The price of LRC has increased tenfold since October.
Wu added, citing a Delphi Digital chart, that trading activity and volume on the DEX have increased since October.
DappRadar reports that the total value locked on Loopring has increased by 570 percent since mid-October, reaching an all-time high of $765 million on November 25.
Loopring was recently in the news due to a rumored partnership with gaming behemoth GameStop. There has been no official announcement, but there has been much speculation about the two working together on an NFT marketplace.
The current state of the L2 market
Loopring is not the only L2 scaling platform that has seen a significant increase in user and liquidity. According to L2beat, the total value of the L2 ecosystem is approaching a record high of $6.9 billion. Loopring is currently the fourth largest L2 network, accounting for 9.7 percent of the market.
Arbitrum is the first layer two, and it prefers optimistic rollups over zk-rollups. Arbitrum currently has a TVL of $2.74 billion, giving it a nearly 40% market share. Arbitrum has been acquiring a growing number of cryptocurrency platforms, the most recent being the Ethereum privacy protocol Tornado Cash.
The Boba Network, which is a smart contract scaling protocol that also uses optimistic rollups, is ranked second in terms of L2 TVL. Boba TVL has increased by 29% in the last week to $1.39 billion, giving it a 20% market share.
With a TVL of $933 million, decentralized derivatives exchange dYdX is third, just ahead of Loopring.
Price forecast for LRC
Loopring’s native token price has naturally risen as a result of increased usage, as it also provides yield farming incentives. LRC is currently trading at $2.80, unchanged on the day.
The token has gained 345 percent in the last month, though it has dropped 25 percent from its all-time high of $3.75 on November 10.