- The start-up Loopring has released a crypto alternative to PayPal based on the layer-2 scaling solution ZK-Rollups that could solve Ethereum’s current network congestion problem.
- Loopring Pay enables the transfer of ETH and ERC20 tokens in near real-time and at a fee of only $0.00006 USD per transaction.
With Loopring Pay, the crypto-reply to PayPal, based on the Ethereum blockchain, went live a few days ago. Loopring is originally a DEX protocol, which focused on trading via a decentralized exchange. As the start-up announced, it now supports not only trading but also the transfer of ETH and ERC20 tokens via Loopring Pay.
Loopring is promising transactions in real-time, without fee and as secure as an Ethereum transaction. The technical basis for it to be realized on the Ethereum network is the promising layer-2 scaling solution ZK-Rollups, which has been discussed in the Ethereum community for quite some time. Loopring has extended its protocol with a relayer to support not only the decentralized exchange, but also payments
Loopring Pay: Ethereum based alternative to PayPal
As the start-up writes on a blog post on the release of Loopring Pay, the solution was developed in response to the huge increase in fees and gas prices, as well as the delays on the Ethereum network. Currently, Ethereum’s largest use case currently is the value transfer via Tether (USDT), however, it is also the largest gas consumer. Loopring Pay can change this, as only marginal gas fees are charged for the transfer.
From the user’s point of view, Loopring Pay initially works similar to PayPal. Since all transactions are done via Loopring’s ZK-Rollups, this means that users must be on the zkRollup to send or receive these fast and free payments. Registration is done via the Loopring.io website and ensures that the user’s Ethereum address is tied to a “slot” (account ID) in the off-chain account system (Merkle tree). Matthew Finestone, Director of Corporate Development at Loopring, stated:
Right now this basically feels like an ‘internal transfer’ on the Loopring Exchange, but we will build more slick, payment-focused flows into our forthcoming Loopring Wallet. Further, other wallets and apps will able to use Loopring protocol or APIs to enable scalable Ethereum-based payments as well.
By integrating Loopring ZK-Rollups for payments into other wallets, services and portals, a certain load could be taken off the Ethereum network. The resulting fees for the ZK-Rollup based payments are marginal. As Finestone notes, all transactions on Ethereum cost something. However, due to the technology, Loopring requires only 0.00006 USD per transaction.
That’s why we can afford to offer free transfers to users. This can change to a low fee in future.
Zhou told Decrypt that building a seamless payment system is the great opportunity for Loopring.
I used to work at Paypal and can definitely see Loopring becoming the PayPal for crypto. We are also going to release a new smart wallet, called Hebao, which will allow users to create an account using an email address. No more remembering private keys.