How does Loopring work?
Loopring is a decentralized exchange protocol that allows users to trade digital assets across multiple blockchains.
It is an open source protocol that enables the creation of high-performance, non-custodial, orderbook-based exchanges on Ethereum and other blockchains. The Loopring protocol works by allowing users to create orders and submit them to the blockchain. These orders are then matched with other orders in the orderbook, and when a match is found, the trade is executed automatically.
The protocol also supports atomic swaps, which allow users to exchange one asset for another without having to trust a third party. The Loopring protocol uses zkRollup technology to ensure scalability and security. This technology allows for thousands of transactions per second while still maintaining the security of a decentralized system.
The zkRollup technology also allows for low transaction fees as it does not require miners or validators to process transactions. In addition, Loopring has implemented a ring-matching algorithm which ensures that trades are executed at the best possible price. This algorithm takes into account factors such as liquidity, market depth, and order size when matching orders in the orderbook.
This ensures that users get the best possible price when trading on Loopring’s decentralized exchange platform.
