what's going on everyone charlie here i feel like it's a good time to talk
about loop ring and we're going to be reading directly from the write paper
uh the white paper a little bit uh just to digitally better explain what it's all about
and uh what it is so let's go and take a look at loop ring a decentralized token exchange protocol
so this is the abstract loopering is an open protocol for building decentralized exchanges
loopring operates as a public set of smart contracts smirk responsible for
trade and settlement with an off-chain group of actors aggregating and communicating orders
the protocol is free extensible and serves in a standardized building block for decentralized
applications otherwise known as apps that incorporate exchange functionality it's inoperable
standards facilitates trustless anonymous trading i'm sorry it's interoperable standards facilitate
trustless and anonymous trading an important improvement over current decentralized exchange
protocols is the ability for orders to be mixed and matched with other dissimilar orders obviating
the constraints of two token trading pairs and drastically improving liquidity blueprint also
employs a unique and robust solution to prevent front running that which is huge in my opinion
and they describe front running as the unfair attempt to submit transactions into a block
quicker than the original solution provider loopering is blockchain agnostic and deployable on
any blockchain with smart contracts functionality at the time of writing it's operable on ethereum
and qtum or quantum with ineo under construction so the important things to take away from this
is smart contracts the protocol is free extensible and serves a standardized building
block for decentralized applications d apps that incorporate exchange functionality drastically
improves liquidity and employs a unique and robust solution to prevent front running loop
ring is blockchain agnostic and deployable on any blockchain with smart contract functionality
now smart contracts are a computer program or a trans transaction protocol which is intended to
automatically execute control or document legally relevant events and actions according to the terms
of a contract or an agreement and here's the reminder of all the important things right here
so introduction with the proliferation of blockchain based assets the need to exchange
these assets among counterparties has significantly increased
as thousands of new tokens are introduced including the tokenization of traditional assets
this need is magnified whether exchanging tokens for speculative trading motivations
or converting to access networks via their native utility tokens the ability to exchange one crypto
asset for another is foundational for the larger ecosystem indeed there is a large potential energy
in assets and realizing this energy unlocking capital requires not only asserting ownership
which blockchains have immutably allowed for but the ability to freely transfer and transform these
assets as such the truth the trustless exchange of tokens is a compelling use case for blockchain
technology until now however crypto enthusiasts have largely settled for trading tokens
on traditional centralized exchanges the loop ring protocol is needed because just as bitcoin
dutifully emphasized that in regards to peer-to-peer electronic cash the main benefits are
lost if a trusted third party is still required to prevent double spending so too are the main
benefits of decentralized assets lost if they must pass through trusted gated centralized exchanges
trading decentralized tokens on centralized exchanges doesn't make sense from a philosophical
perspective as it fails to uphold the virtues these decentralized projects espouse there are
also numerous practical risks and limitations in using centralized exchanges which are described
below decentralized exchanges or dexes have sought to address these issues and in many
cases have succeeded in alleviating security risks by using blockchains for dis for disintermediation
now however as dex capability becomes crucial infrastructure for the new economy
there is substantial room for performance improvement loopering aims to provide
modular tools for said infrastructure with its d-app agnostic protocol how about that
so the loop ring protocol loop ring is not a dex but a modular protocol for building dexes
on multiple block chains that is critical we disassemble the component parts of a traditional
exchange and offer a set of public smart contracts and decentralized actors in its place
decentralized actors hmm wonder who those could be the roles in the network include
wallets relays liquidity sharing consortium blockchains order book browsers ring miners
and asset tokenization services before defining each we should first understand loop ring orders
looping orders expressed in what we call or they are expressed in what we call a
unidirectional order model which is a udom udon expresses orders as token exchange requests
amount s divided by amount b amount to sell or divided by the amount to buy instead of
bids and asks so they're taking away the bid and ask since every order is just an exchange
rate between two tokens a powerful feature of the protocol is the mixing and matching of
multiple orders in circular trade by using up to 16 orders instead of a single trading pair
there is a dramatic increase in liquidity and potential for price improvement
this is the diagram here of the udom
now the above figure shows an order ring of three orders each order's token to sell
or token s is another orders token to buy or token b it creates a loop that allows each order
to exchange their desired tokens without requiring an opposing order for its pair
traditional ordered pair trades can of course still be executed
in what is essentially a special case of an order ring how about them apples man shit's pretty cool
so an order ring is valid when all component transactions can be executed at an exchange
rate equal to or better than the original rate specified implicitly by the user
to verify ordering validity loop ring protocol smart
contracts must receive order rings from ring miners where the product
of the original exchange rates of all orders is equal to or greater than one
smart makes a lot more sense now doesn't it the smrt
now let's talk about wallets a common wallet service or interface that gives users access
to their tokens and a way to send orders to the loopering network wallets will be incentivized
to produce orders by sharing fees with ring miners with the benefit that the future of trading will
take place within the safety of individual users wallets connecting these liquidity pools through
our protocol is paramount and these are the ecosystem participants we're talking about
we have the wallet now we have the consortium liquidity sharing blockchain or relay mesh a
relay mesh network for order and liquidity sharing is basically what this is when nodes run loop ring
relay software they are able to join an existing network and share liquidity with other relays over
consortium blockchain the consortium blockchain we are building as a first implementation has
near real-time order sharing in one to two second blocks and trims old history to allow for faster
download by new nodes notably relays need not join this consortium they can act alone and not
share liquidity with others or they can start and manage their own liquidity sharing network
relays and ring miners relays are nodes that receive orders from wallets or the relay mesh
maintain public order books and trade history and optionally broadcast orders to other relays via
any arbitrary off chain medium and or relay mesh nodes ring mining is a feature not a requirement
of relays it is a it is computationally heavy and is done completely off chain we call relays
with the ring mining feature turned on ring miners who produce order rings by by stitching together
disparate orders relays are free in number one how they choose to communicate with the with the other
two how they build their order books and three how they mine order rings or mining algorithms
now let's look at loop ring protocol smart contracts they are a set of public and free
smart contracts that check orders or order rings receives from ring miners trustlessly
settles and transfers tokens on behalf of users incentivizes ring miners and wallets with fees
and emits events relay slash orders or relay order browsers listen to these
events to keep the order books and trade history up to date
asset tokenization services or ats this is a bridge between assets that cannot be directly
traded on loopering they are centralized services run by trustworthy companies or organizations
gamestop users deposit assets real fiat or tokens from other
chains and get tokens issued which can be redeemed for the deposit in the future
loop ring is not a cross-chain exchange protocol until a suitable solution exists but ats
enable trading of erc-20 tokens with physical assets as well as assets on other blockchains
what do you think sounds pretty neat right if you want to look at this white paper i'll link
it below it's about 17 pages long and uh you know it talks about the stuff i didn't mention
in this video talks about fraud and attack protection decentralized governance the lrx token
uh the fee model and then you have an appendance with some objectives so
their their main objectives by the way is make fee payment more flexible move the friction of
requiring a specific p-famous token ensure the lrc token is coveted and provides real
utility to the network and remain rent free with all benefits remaining and protocol
accruing to every participant we realize that while incentives are the most powerful
force to allow rational actors to organize themselves mechanisms which optimize for
their desired networks behaviors are valuable so let me know what you think have a good one