Trading straight out your wallet: The Loopring Protocol

What the hell is a Loopring? The case for a decentralized exchange protocol

not this

yes, this

Right now, if I want to trade some of my Steem for a currency that isn't on the same exchange, I'd have to send Steem from a wallet to an exchange, trade it for something else like BTC, send that Bitcoin to the exchange that has the coins I want, trade for them, and then send those tokens to another wallet. If this process sounds like a giant pain in the ass, that's because it really, really is. A project that's captured my attention recently which aims to address that problem, is Loopring.

The idea behind Loopring is really simple and really elegant. What if, using a single wallet, you could trade whatever you want without having to put your coins on an exchange? Simply put in an order, and your coins stay in your wallet until that order is filled and you become the proud owner of whatever it is your buying. No exchanges, no loss of control of your funds in the meantime. Zero trust trading. It's a cool concept and one that I'm sure I'm not the only one seeing the potential in. The tech underlying this sleek vision is a tad more complicated and though I'm not a techie by any means, I'm going to try and outline the basics of what they're trying to do.

We'll get back to you once we have a solution Ma'am

When you place an order through the Loopring wallet, you begin a process whereby multiple exchanges are checked in order to secure the best possible price in the quickest time for your order. To facilitate this, your order may be broken down into smaller suborders. The actual transactions taking place in this process may involve multiple different tokens and users in a process they call 'ring-matching.' The actual processing of all these transactions is done by 'ring-miners' who get a cut of the savings that are being passed on to you in exchange for mining the rings.

This is really one of the cooler features of Loopring. Essentially, the interests of both ring-miners and users align in that you both come out with the best possible deal by them finding you the most cost effective solution.

Are we there yet?

Not quite, no. There's a lot of work to be done on the protocol before it's as easy as being able to trade across multiple platforms on a whim. At the moment, the team are concentrating on working with Ethereum and ERC20 tokens. There is an initial release of the wallet (in early beta) available and you can check out an article on that by Daniel Wang, the CEO of Loopring, here: https://medium.com/loopring-protocol/an-introduction-to-loopr-wallet-34832e343d8b
Future plans are to expand onto the NEO and QTUM block chains and then eventually others.

One of the biggest challenges facing the project is facilitating cross-chain trading. At the moment Dan Wang is not promising this capability, a factor which whilst making me slightly less bullish on the project certainly doesn't make it a write off. Basically, he's stated that there will be time and resources dedicated to making this happen, but they don't have a solution for it yet. He goes into a bit more detail about that and the protocol itself in this interview here: