Loopring’s Solution to High Ethereum Gas Fees

Loopring’s Solution to High Ethereum Gas Fees

Loopring (LRC) have added Rocket Pool (RPL) to the trades available on their decentralised exchange (DEX) and in doing so highlighted the solution they provide to the current high gas fees on the Ethereum blockchain.

While the surge of trading volume across other exchanges for Rocket Pool has been previously noted and the future use case of the RPL token warrants inclusion on the DEX, it is Loopring’s use of zkRollups to reduce fees that has been garnering wider attention.

For Techies and Non-Techies

Ethereum’s gas fees are determined by the cost of processing a transaction on the network. The recent spike in price has seen a number of analysts, including Gains Associates, delving into the reasons that maybe contributing to the upward pressure.

Since launching their $45 million initial coin offering (ICO) in 2017, Loopring have been focusing on the implementation of zkRollups to increase the scalability of transferring assets while reducing the associated costs. In basic terms, this is achieved as layer 2 solution involving the bundling, or rolling-up, of hundreds of transfers into a single transaction.

This approach is showing results in terms of platform usage – Loopring have now completed their millionth trade on the DEX – and recognition from the most prominent of Ethereum’s founders, Vitalik Buterin.

In a recent interview with DeFi Pulse, Daniel Wang, the founder and CEO of Loopring, explained that he believes “…zkRollup is the right solution for scalability, not just for exchanges, but many dApps that are designed to target millions of active users.”

Wang also noted how confusing entering the cryptocurrency market can be for newcomers “…and DeFi on-boarding is quite challenging for users without a technical background…” which is why Loopring are soon to launch a new smart wallet app that will provide “…a mobile platform for a massive user base with a language they speak and set of features they can quickly understand.”