The recent announcement of Gamestop’s Partnership with Immutable X and Loopring’s “involvement” is still causing confusion amongst Reddit users. However, there still is a rosy outlook for the future as outlined by wccftech.
Loopring (LRC), a decentralized exchange (DEX), saw the price of its native coin eviscerated recently amid a broad-based swoon in the crypto market. Nonetheless, while GameStop’s partnership with Loopring over a bespoke NFT platform bodes well for the coin’s medium-term prospects, its bullish thesis goes much deeper.
As is evident from the chart above, Loopring coin’s price is currently in a tailspin. Of course, the wider crypto market swoon over the past few weeks is likely to have played an important part in precipitating this price crash. Nonetheless, as Bitcoin’s narrative undergoes a critical change, with its proponents now billing the world’s premier cryptocurrency as a superior geopolitical hedge after it failed to serve as a viable inflationary hedge earlier this year amid soaring correlation with high-beta growth stocks, there is a growing consensus that Bitcoin might be preparing for another major takeoff. After all, Bitcoin is now well off its year-to-date lows. Moreover, as inflows soar amid the Russia-Ukraine conflict, the bullish thesis for Bitcoin and for the rest of the crypto sphere in conjunction is growing stronger.
Read: Gamestop Immutable X Partnership
As far as Loopring’s intrinsic bullish factors are concerned, a formal initiation of a partnership with GameStop’s NFT platform will serve as the next major bullish catalyst. As a refresher, Immutable X became an Ethereum Layer 2 (L2) partner for GameStop’s NFT platform back in early February, enabling “zero gas fees for trading and minting NFTs in a carbon-neutral environment”. Immutable X claims that it is the first Layer 2 on Ethereum that is geared toward NFTs. For the uninitiated, the L2 is an entire protocol that is built on top of the Ethereum blockchain. The protocol interacts with the main blockchain via smart contracts – programs that automatically execute actions when certain conditions are met. Moreover, the Immutable X Mint allows users to create and distribute assets (based on ERC-721 and ERC-20 protocols) in a convenient and secure manner.
Nonetheless, hidden within GameStop’s Form 8-K filing for this announcement was a crucial tidbit on Loopring’s upcoming major role vis-à-vis the NFT platform. As we detailed in a dedicated post, GameStop indicated on page 22 of the filing that it would integrate the Layer 2 technology of Immutable X as well as Loopring in its upcoming NFT-focused platform:
Readers should note that Immutable X is a protocol for an NFT marketplace. Since it is non-custodial in nature, GameStop’s NFT users would presumably need a wallet to interact with the Immutable X protocol. A potential avenue of partnership might emerge if GameStop chooses to integrate Immutable X’s NFT protocol with the Loopring wallet, creating a convenient and all-encompassing solution for its NFT-focused platform.
Loopring has recently launched the much-anticipated L2 counterfactual wallets. This is a wallet with limited features that can be deployed directly on the L2, thereby evading the hefty gas fees associated with the creation of Loopring’s full-fledged L1+L2 smart wallet. As an introductory product offering with limited features, counterfactual wallets offer basic security while allowing users the ability to receive Ether and other tokens on Ethereum L1. This development was seen by many as a critical component for possible integration with GameStop’s NFT platform.
Nonetheless, until further details emerge, this particular partnership avenue will remain within the realm of educated conjecture.
Loopring’s Fundamental Structure Constitutes Its Strongest Bullish Thesis
For the uninitiated, Rollups are a Layer 2 (L2) solution that aggregates and processes transactions outside of Ethereum’s main blockchain. These processed transactions are then bundled and posted on the main chain, thereby sidestepping Ethereum’s scalability problem and the associated prohibitive transaction processing fees (gas fees). Loopring uses a new type of Rollup, dubbed the zkRollup (zero-knowledge Rollups). A zero-knowledge proof makes a claim regarding the accuracy of a particular data set without actually sharing that data. This is done by generating proofs based on cryptographic computations for each batch of transactions. Since zkRollups do not require a challenge period, as the validity proofs have already verified the legitimacy of the underlying transaction data, transactions can be processed very quickly. In fact, Loopring claims that it can process over 2,000 trades per second.
This brings us to the crux of the matter. Users can mint NFTs on Loopring L2 for under $1. However, there are other solutions that allow users to mint NFTs virtually for free. So, where is Loopring’s decisive advantage?
Well, readers should understand that whenever platforms give something for free, there are tradeoffs involved.
Loopring L2 is directly built on Ethereum, using the magic of #zkRollups💙, which means it directly inherits the security of Ethereum L1
— byron.loopring ( B.👾 ) (@macro_diary) February 26, 2022
Other #NFT platforms that offer free minting are typically sidechains (rely on their own security) or store data off-chain (like Validium)
3/
For instance, Validium L2 allows very cheap minting of NFTs but stores data off-chain. This creates a tradeoff between transaction efficiency and security.
Loopring has tried to adopt a much more balanced approach to this dilemma. Minting NFTs on Loopring L2 is certainly a lot cheaper than on Ethereum L1. However, it is still expensive when compared with some of the other NFT-focused platforms. To counterbalance this downside, Loopring offers an almost unmatched degree of decentralization and security:
Put simply:
— byron.loopring ( B.👾 ) (@macro_diary) February 26, 2022
If something happens to the sidechain or Validium chain operator (hack, malicious inside actors, gov censorship)… it means your funds are at risk also
If something happens to a zkRollup (Loopring), you exit your funds back to Ethereum (no risk to funds)💙
4/
Due to the fundamental structure of zkRollups, in case of a security breach on Loopring, users can simply move funds back to Ethereum L1. This means that user funds are almost never under threat. This is a fundamental differentiating factor that we believe constitutes a major bullish impetus for Loopring.
