Loopring

Loopring Report – 23rd Dec’22

Loopring is an open protocol designed for the building of decentralized crypto exchanges.

The CMP of LRC on 23rd December 2022 is $0.202.

The Problem Statement:

The majority of crypto trading takes place on centralized exchanges, which are commercial platforms run by private businesses and used to hold user funds and match buy and sell orders.

There’s a risk of Fraud as the funds are in the Custody of the Exchange. 

But even decentralized exchanges can have flaws as some decentralized exchanges might lack liquidity. So to solve the problem between centralized and decentralized exchanges, someone is working on it. Let’s understand it.

What is Loopring?

Loopring aims to create a hybrid product that combines the greatest features of both centralized and decentralized exchanges by combining centralized order matching with decentralized on-blockchain order settlement.

Loopring is a layer-2 protocol that is built upon the Ethereum blockchain and was launched in 2019. 

The main idea of Loopring is to combine the features of both Centralized and decentralized exchanges and overcome their inefficiencies.

How is it Unique?

Loopring also provides payments. Users can send ETH and ERC20 tokens to any Ethereum address using the same innovative systems. 

The challenge with centralized exchanges is the ability of the exchange to manipulate prices.

They can use users’ funds while in custody as the trades are not settled on the blockchain but rather stored in the exchange’s internal records.

To solve these issues, a new type of exchange is made where DEX helps users buy and sell orders directly with each other.

Also, they settle trades on a blockchain which removes the custodial and transparency risks associated with keeping funds in custody, and centralized exchanges are more efficient and have liquidity.

 

Tokenomics:

The native token of the Loopring is LRC. The total supply of LRC is 1.37 Billion & ~97% of the total maximum Supply(1.33 Billion) is in circulation. It has a market capitalization of $275 Million. The current Coinmarketcap ranking of the Loopring is #93.

 

 

 

 

 

Competition Analysis:

Loopring vs Optimism:

Loopring and Optimism both are Layer-2 blockchain solutions. The entire value of all assets locked inside DeFi protocols is measured by TVL. Every coin deposited in any of the DeFi protocols’ lending, staking, or liquidity pools is included in TVL.

The DeFi ecosystem’s health can be evaluated using TVL. The higher the TVL, the more faith individuals have in DeFi, as it demonstrates how much value they are willing to lock up in DeFi contracts.

The TVL of Optimism is $1.14 billion and the TVL of Loopring is $82.54 million.

 

 

Team, Media, and Community:

Software engineer and businessman Daniel Wang, based in Shanghai, China, is the founder of the Loopring Foundation. Currently. Steve Guo is the CEO of Loopring Foundation.

Wang holds both a master’s degree in computer science from Arizona State University and a bachelor’s degree in computer science from the University of Science and Technology of China.

He was the lead software engineer at the medical device manufacturer Boston Scientific, and the senior director of engineering of search, recommendation, and ads system at the Chinese e-commerce giant JD.com, as well as a tech lead and senior software engineer at Google, these are just a few of the managerial and executive positions Wang has held before beginning work on Loopring.

Conclusion:

Loopring seeks to make trading assets and making payments on Ethereum faster and cheaper, without sacrificing security. It has been trying to bridge the gap and solve issues both centralized and decentralized exchanges have been facing. With intentions to add support for the Qtum blockchain, Loopring is now operational on the Neo and Ethereum blockchains.

Pros:

1) Combining the best features of both centralized and DEX.

2) It has Low gas fees compared to Ethereum.

Cons:

1) Low adoption.

2) Loopring faces strong competition from other players like Kyber Network and many more.

 

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Weekly Crypto Market Report – 19th Dec’22

What is the general sentiment for Crypto?

The sentiment towards the cryptocurrency market is in the fear zone. Compared to last week’s, the Fear & Greed Index has changed from “27” to “29”. 

SOPR

Another data to evaluate the sentiment of the general public would be to look at Spent Output Profit Ratio (SOPR). What is SOPR? In layman terms, it indicates if people have sold their BTC at a profit or if they sold at a loss. An SOPR value above 1 indicates that profit booking dominated loss booking and below 1 indicates that loss booking dominated profit booking. A value of 1 indicates that the coins were sold at their purchase price. Adjusted SOPR filters out transactions that are younger than 1 hour, thus, clearing out noise from the metric.

aSOPR for this week stands at 0.98 which means the coins on average are being sold near their purchase price 

Is This The End of the Bear Market?

BITCOIN RAINBOW CHART INDICATOR

The Rainbow Chart is a long-term valuation tool for Bitcoin. It uses a logarithmic growth curve to forecast the potential future price direction of Bitcoin.

It overlays rainbow color bands on top of the logarithmic growth curve channel in an attempt to highlight market sentiment at each rainbow color stage as price moves through it. Therefore highlighting potential opportunities to buy or sell.

Historically the blue band indicated the bottom of the cycle, blue band which is also called as the fire sale period offers extraordinary rewards to the risk

REALIZED PRICE

Realized price is defined as the average cost of acquisition based on every coin moved on-chain. In all the previous bear markets we see that the price trades below the realized price which indicates on average the coins held during this period have higher cost of acquisition than the current market price. Realized prices act as psychological support areas during bear markets.

The current price of Bitcoin is trading below the realized price of Bitcoin of 19,980 USD. For bull market confirmation, the market price of Bitcoin should be above realized price. 

MVRV, Z-SCORE

The MVRV, Z-score has historically been very effective in identifying periods where market value is moving unusually high above realized value. These periods are highlighted by the z-score (red line) entering the pink box and indicating the top of market cycles. It has been able to pick the market high of each cycle within two weeks.

It also shows when market value is far below realized value, highlighted by z-score entering the green box. Buying Bitcoin during these periods has historically produced outsized returns.

Overall Market Performance

Dow Jones

The Dow Jones Industrial Average corrected by 1.82% in the last week. The next resistance is expected at 37,000 and immediate support is expected at 33,000 levels.

Gold

Gold Futures formed Inverted head and shoulder pattern, trend reversal is expected. The next resistance is expected at $1,820 and immediate support is expected at $1780

Bitcoin

Bitcoin is trading at the support and volume is drying which is an indication of a big move. The next resistance is expected at $21,500 and support at $15,500

ETHEREUM

ETH/BTC is showing a volatility contraction pattern which is an indication of a big move. The next resistance is expected at 0.080 and next support is expected at 0.065.

Highlights of the week:

Goldman Sachs used a private blockchain to arrange a 100 million euro two-year digital bond for the European Investment Bank that was settled in 60 seconds instead of the usual five days. 

 

 

 

 

Despite crypto winter, first-time and returning buyers per day in Polygon’s NFT market reached new all-time highs during the last month of the year.

 

 

 

Apple plans to enable the installation of apps from external sources outside of its own App Store on iPhones and iPads because of European Union’s Digital Markets Act, which requires tech companies to fully comply with restrictions by 2024.

 

 

 

 

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