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The congestion of Ethereum has severely affected its wider adoption. This is a well-known thing. As long as you experience DeFi, you will know how expensive and slow it is. The block space of Ethereum is increasingly becoming a place for zero-sum games. The amount of transactions that can be reached by Ethereum every day is relatively fixed, and different DeFi projects compete fiercely in order to compete for limited channels. In this fierce competition, some projects are losing competitiveness due to their business attributes.
An important market that suffers from this is the game and NFT market. Most games and NFT transactions are in the tens of dollars and below, and the current transaction fees may be as high as tens or even hundreds of dollars, which means that some NFT transactions will become unprofitable, leading to the shrinking of the entire market , This is not alarmist, but this is happening in the current largest NFT trading market Rarible, and its weekly trading volume has begun to decline significantly.
But this is not an unsolvable problem. For a long time in the past, solutions such as Layer2, sharding, and cross-chain have been constantly explored, and sharding is too long for Ethereum.
In the short to medium term, the most practical way to improve scalability based on Ethereum is to adopt Layer 2 technology. Regarding the Layer 2 solution, Blue Fox has discussed it many times before. You can refer to the previous articles "Layer 2, Ethereum and the public chain pattern", "Ethereum's Layer 2 track" and so on. From a long-term perspective, Blue Fox Note is optimistic about the exploration of ZKRollup technology, mainly considering that it has not made too many compromises in security, and its user experience can basically reach the level of CEX, such as low transaction costs and fast transaction speed Wait.
The Loopring Protocol recently launched version 3.6, which has brought a significant improvement from its DEX data.
Changes brought by Loopring Protocol 3.6
Loopring Protocol 3.6 is a Layer 2 solution based on ZKRollup technology. It is a decentralized transaction and payment protocol. After its launch, you can see the obvious changes it brings.
- Total amount of transactions, total number of accounts, and total value transferred
Loopring Protocol 3.6 has not been launched for a long time. At the time of writing, the total transaction volume based on it has reached more than 72 million US dollars, the total number of accounts has exceeded 11,000, and the total transfer value has exceeded 110 million US dollars.
Daily transaction volume growth trend
The current daily trading volume of Loopring DEX is approximately close to 12 million US dollars, while its daily trading volume was less than 2 million US dollars just a few days ago. However, the growth rate in recent days has been rapid, and the daily trading volume of the AMM part is close to 9 million U.S. dollars, and the daily transaction volume of the order book section is close to 3 million U.S. dollars.
Loopring DEX based on ZKRollup technology
There are many decentralized transaction protocols, and the Loopring protocol is one of them. However, the characteristic of the Loopring protocol is that it uses ZKRollup's layer2 technology. At present, there are very few that can actually be implemented in this regard, and Loopring is the earliest on this point. One of the planners, its second-tier AMM mainnet has also been launched recently.
Loopring DEX is a decentralized exchange application based on the Loopring protocol. It currently uses the Loopring protocol version 3.6. At present, in addition to Loopring DEX, there are other DEXs (such as WeDEX) that are also using Loopring Protocol 3.6 to build their decentralized exchanges. In other words, the Loopring protocol itself can be used by more DEXs. It itself mainly provides a set of exchange contract logic, such as registration, recharge, trading, transfer, and withdrawal.
DEX itself is not uncommon, so what is the difference between Loopring DEX based on Loopring Protocol 3.6?
- Throughput
The DEX based on Loopring Protocol can theoretically complete more than 2,000 transactions per second. In contrast, the current Ethereum can handle less than 20 transactions per second, which is a big improvement.
- Low cost
Based on Loopring Protocol 3.6, according to Loopring’s calculations, the cost per million transactions is about less than 1,000 yuan, that is, theoretically, the cost per transaction is less than 0.001 yuan. This part of the cost includes the gas fee of Ethereum and The cost of generating zero-knowledge proofs off-chain. Compared with the current transaction fees that often exceed tens of yuan, it is extremely cheap.
- Safety
In addition to the lower transaction fees and faster speed than the current DEX such as Uniswap and Sushiswap, its security can basically reach the level of layer1. Even if the front end of the exchange ceases to operate, users can still withdraw their assets through Merkel's proof. Merkel's proof can be calculated by data availability on the Ethereum chain.