ICOs, or initial coin offerings, are one of the most controversial aspects of the cryptocurrency industry. Thousands of startup companies around the world are now using tokenization to circumvent traditional venture capital, and are achieving massive amounts of success doing so.
Loopring, a highly popular blockchain based startup, has recently raised over $45 million in a successful initial coin offering that concluded in August this year. The Loopring platform is based entirely within the blockchain ecosystem, which- according to Loopring founder Daniel Wong- made an ICO the ideal method of gathering startup capital for the project:
“Our project is pure blockchain, where transactions are based on using tokens and has nothing to do with the real economy. This means we do not earn revenue from the real economy, and all our income and profits are used for reference only. So fund raising through ICO is the best and only method for us.
“Financing through ICO is fast and the amount of funds raised is high, which is beneficial to our project team.”
What is Loopring?
The Loopring platform is a decentralized cryptocurrency trading exchange that aims to address the issues presented by the exchanges that are currently in use in the blockchain ecosystem today. While digital currencies may themselves be decentralized, the most popular trading platforms today are not, which creates a number of problems.
Centralized exchanges are prone to hacking attacks, which can (and has) resulted in the loss of millions of dollars worth of cryptocurrency. On some occasions, the centralized nature of the exchanges in use today can also severely inhibit the freedom of users, such as Coinbase’s recent decision to freeze the account of users in Wyoming and Hawaii until regulatory workarounds can be found.
The Loopring platform negates these issues by functioning as a decentralized exchange, delivering greater levels of liquidity and transparency. Loopring doesn't require that their users send their tokens to a third party for custody. Instead, Loopring users retain control over their tokens at all time, protecting them from threats such as exchange hacks, bankruptcies, or DDOS attacks.
How Loopring Works
On the Loopring platform, orders placed by users are executed automatically while their trade funds remain under their control, albeit locked in a decentralized smart contract on the blockchain. The mechanism that drives the Loopring platform breaks orders down into small pieces, then identifies the best time and place to trade these pieces.
This process uses advanced game theory logic to optimize trading results. Importantly, Loopring is blockchain agnostic, and is compatible with any blockchain that supports smart contracts. Once a blockchain is connected to Loopring, all ERC20-like tokens on that blockchain can be traded using Loopring.
The Current State of Loopring
The Loopring ICO has already successfully concluded, and the development team is currently working on finalizing the first release of the platform. Users should expect a release by the first quarter of 2018.