The year 2017 definitely marks the big breakthrough of cryptocurrencies. Not only did the price of Bitcoin skyrocket, but altcoins also gained a lot of attention. This caused more people to join the investment craze and launch their own coin through initial coin offerings (ICOs) in order to attract funding for their projects. In the second quarter of 2017 nearly 800 million USD was raised with ICOs.
In China the ICO frenzy started in the beginning of April. Whilst the Chinese government has a strong interest in developing blockchain, the sudden rise in attracting funds through ICOs was worrisome for the Chinese government. As in many other countries, China faced the problem of many vague projects with unrealistic user cases and immature technology receiving millions of RMB in investment. This led to the Chinese government announcing an ICO ban on the 4th of September making it illegal to raise funds through ICOs. Funds raised recently had to be returned to investors. In mid-September centralized exchange platforms including BTCC, Huobi and OKCoin were forced to close their operations amidst ongoing concerns of facilitating capital flight.
These Chinese announcements led to a strong dip in the crypto market. Within a matter of hours prices went downhill steeply and NEO, China’s most famous blockchain project, saw its price decrease by more than 50%. In the second half of September, the ‘China fud’ slowly disappeared and prices slowly stabilized and recovered.
Now the dust seems to have settled and China Crypto News wanted to take the time to get to know more about one of the Chinese projects which was rather unaffected during the recent turmoil: Loopring. We contacted the Loopring team and spoke with co-founder and CMO Jay Zhou.
“We hope to be on Bittrex in one to two months”
– Jay Zhou, CMO Loopring
Jay Zhou got to know about Bitcoin back in 2013, when one of his colleagues introduced it to him. In the beginning it just seemed like a Ponzi scheme to him, but he took the time to understand the underlying technology and became assured of its potential. Since he was working for PayPal at the time, he and some other colleagues formed a group to discuss whether PayPal should accept bitcoin. Zhou’s interest quickly expanded from bitcoin to blockchain (the underlying technology), and last year he joined Zhongan Lab, one of China’s largest blockchain labs.
Q: How Loopring was started?
Jay Zhou:“In 2016, I was working together with Daniel on a project at the Zhongan Lab when he told me about his idea to develop Loopring. It triggered my interest from the beginning and felt like this is what the future will look like. We have all seen what happened to Mt. Gox in 2013 and Bitfinex in 2016, when hundreds of thousands of bitcoins got stolen after the platforms were hacked. Loopring offers an answer to this by decentralizing trading and avoiding big numbers of coins at centralized points.”
Q: Could you tell us a bit more about the team working on Loopring?
Jay Zhou: “Daniel Wang came up with the idea and designed the first batch of algorithms and mathematical models. Recently we have been growing quite fast, and at this stage we have about 15 people working from our office in Shanghai. In addition, we wouldn’t be where we stand today without our ever growing and loyal community. We have about 1100 members on Slack, where we publish new projects and tasks. Community members get rewarded with tokens if they contribute to developing Loopring, a similar open source model as NEO. Because of our strong community we expect to launch before the end of the year, rather than February 2018 as mentioned in our roadmap. The first step will be to launch our platform on the Ethereum blockchain, the second logical step is to launch on NEOs blockchain. In a later stage we will implement cross-chain transactions. As long as a blockchain supports smart contracts, the Loopring protocol can be implemented and all ERC20 tokens can be traded.”
Q: As Loopring is not the only project working on a decentralized exchange, lots of discussions are going on in online communities about how it differs and compares to Kyber, 0x and OmegaOne. Can you tell us more about this?
Jay Zhou: “Our project is based on five pillars, and in my opinion two of those make us truly unique when comparing us to other decentralized exchange projects: order sharing and ring-match technology that we are currently developing. This mechanism enables traders to trade not just in fixed pairs as is currently common practice, but all orders will be split into small pieces and matched with the best available rate across many exchanges. This will lead to significantly higher liquidity and ensure traders can get the best price.”
“We closely work together with NEOs BD team if we want to expand internationally”
– Jay Zhou, CMO Loopring
Q: On Loopring’s website we can see quite a big list of advisors. Among them Zhongan Blockchain Lab’s CTO Li Xuefeng and NEO founder Da Hongfei. Can you tell us more about their exact roles in relation to Loopring?
Jay Zhou: “Currently there is no formal relationship between Loopring and Zhongan Lab, and Li Xuefeng in particular. The same applies to Da Hongfei. Daniel and Da Hongfei are good friends, so obviously they talk about what’s going on with their projects. In the beginning stage of Loopring, we did ask Da and the NEO team to give feedback on our ideas and whitepaper and used their comments to further improve our plans. The good relationship between Loopring and NEO is also being utilized for business development. NEO obviously really took off over the last couple of months, expanded their network across the world and gained huge international attention. So if we, for example, want to expand to Japan, we must closely work together with NEO’s business development team to get in touch with the right people.”
Q: What is Loopring’s view on the recent developments of the Chinese government banning ICOs? And what do you think about the future of blockchain development in China?
Jay Zhou: “I think there is general consensus among investors, developers and other parties with interests in cryptocurrencies and blockchain that regulation is necessary. I am very positive about the future of blockchain in China. Twenty years ago, China missed the big wave during the internet boom. The government won’t let it happen that China’s misses another big wave. So if you look to blockchain, artificial intelligence and other areas of innovation, you can actually see a lot of support from the government.”
Q: How did it affect Loopring? And what happened with the returned coins?
Jay Zhou: “Obviously, as we finished our ICO at the end of August, the recent ICO ban in China affected Loopring. We did what we had to do according to Chinese regulations and refunded all investors that replied to our announcement. However, a large part of the coins were already being traded on secondary markets, making it basically impossible to retrieve them. The majority of the returned coins were destroyed, another 30% put aside for the developer team and 15% is available for Loopring’s long-term incentive program.”
Q: Two weeks ago, Loopring was listed on HitBTC. When can we expect Loopring to be listed on more exchanges?
Jay Zhou: “Alongside the technical development of Loopring, the team is also working hard behind the scenes to be tradable on more exchanges. Like you mentioned, we just got listed on HitBTC. Currently we have ongoing talks with Bittrex and hope to be on there in about one to two months. For next year we plan to get listed on Poloniex and Kraken as well.”
Disclaimer: the opinions expressed in this article are solely for informational purposes. They do not constitute investment advice. Appropriate independent advice should be sought where appropriate.