coinculture.com
Rumours about a possible partnership between Loopring and GameStop have sent the price of LRC stratospheric.
What is Loopring?
Loopring is a layer-two solution for Ethereum that utilizes zk-rollups. Zk-rollups, which Vitalik Buterin is banking on as the solution to Ethereum’s scaling issues, are a way of claiming the accuracy of a data set without sharing the actual data. For instance, a transaction may claim a certain amount but not disclose the exact number. These transactions get bundled into a single one, which later gets verified on the first-layer blockchain, in this case, Ethereum. At their core, zk-rollups are a highly efficient way of scaling the base layer blockchain.
Users on Loopring have to send their funds to a Loopring-owned smart contract, which moves the user-identifying information off-chain and batches together the associated trades. Each batch is eventually added to Ethereeum utilizing these zk-rollups. That way, Loopring claims to be able to process over 2,000 transactions per second (tps), a more than 100X improvement over Ethereum’s native 15 tps.
So, why did Loopring pump?
The crux is that Loopring has been around since 2017. In fact, the project is older than some of the more popular scaling solutions for Ethereum, such as Polygon. The recent price surge can be traced back to a possible partnership between Loopring and GameStop (GME). Evidence of that can be found online.
For instance, certain snippers of Loopring’s source code on GitHub suggested integration between the two platforms. Also, a new job posting by GameStop was posted online, with the company looking for a “Product Owner – Head of Web3 Gaming [REMOTE] In Seattle”. The requirements specified knowledge of crypto and NFT projects, but also working knowledge of integrations with different blockchain and Ethereum layer-two solutions. Investors took this as another indicator that a partnership was on the cards.
Loopring price mooning
Loopring’s previous all-time high was recorded back in 2018 at $2.59 ($3.08 AUD), an indication of how long the protocol has already been operating. After a long drought with sideways trading, LRC started surging at the beginning of November and set a new all-time high at $3.83 ($5.08 AUD) on November 10. It has since retreated but still trades well above levels recorded in October.
More Ethereum layer-twos to follow suit?
That begs the question of whether Loopring was a one-off or whether “layer-two season” has just begun. Polygon co-founder Sandip Nailwal suggests the latter is the case, as he expects Ethereum to overtake Bitcoin in the long run. While he may not be the most impartial judge in this case, considering Polygon is a layer-two solution itself, Ethereum scaling solutions may indeed be edging closer to relieving some of the pressure on the Ethereum mainnet.
Polygon has recently announced to be working on zk-rollups itself, and Binance will support deposits from Arbitrum, another Ethereum scaling solution. With Ethereum feeling the heat from its layer-one competitors, this may bring much-needed support before the targeted launch of Ethereum 2.0 in 2022. As for crypto users, the good times may have only just begun.