Loopring, a lesser-known cryptocurrency, has soared by more than 66 percent in just 24 hours in November.
After trading for less than $1 (£0.74) a week ago, the Ethereum-based coin is currently worth over $3.70 (£2.74).
What is Loopring, precisely, and why has it become so popular?
What exactly is Loopring?
“We design protocols, infrastructure, and user-facing products for the future of banking,” says Loopring.
It boasts about its Ethereum layer two (L2) platform, which it claims can settle up to 2,025 trades per second while still being secure.
It accomplishes this by employing the zkRollup structure, which verifies the correctness of crypto transactions off-chain.
“To build and engineer the best-in-class zkRollup exchange and payment system on Ethereum, and to operate products that bring it to people around the world,” according to Loopring.
The Loopring token (LRC) is the Loopring protocol’s native token that may be used to pay fees on Loopring L2.
The Loopring Wallet, which claims to be the “first smart wallet software with L2 scalability, and provides a secure, intuitive, and powerful Ethereum experience in your pocket,” is Loopring’s own wallet.
It requires money to start a wallet — around $500 at the moment. These wallets, on the other hand, have a lot of security features, including the ability to lock it and recover it if it is lost or stolen.
What’s causing the price to skyrocket?
Loopring began to gather traction in late October, before skyrocketing in November, with a 400% increase.
Much of the excitement stems from reports that GameStop — the same GameStop that threw the stock market into a tailspin in January – is considering using Loopring technology for a future NFT (non-fungible token) marketplace.
In recent months, NFTs have grown immensely popular. They are one-of-a-kind digital assets – such as an image file or a ticket – that reside on the Ethereum blockchain and may be traded in the non-digital world like art.
NFTs are viewed by some as the internet’s future, while others say they are nothing more than a money-laundering scheme.
In any case, a hypothetical merger between GameStop and the NFT sector has a lot of people interested, especially casual investors in Reddit forums.
Should I make an investment?
People invest at their own risk, and British financial authorities do not oversee cryptocurrencies.
All cryptocurrency investments are dangerous, and you should expect to lose your entire investment. It is critical to conduct extensive study before investing any funds.
“Investing in crypto assets, or investments and lending connected to them, often involves accepting very high risks with investors’ money,” the Financial Conduct Authority (FCA) said in January.
“Consumers should expect to lose all of their money if they invest in these types of products.”
Hargreaves Lansdown’s senior investing and markets analyst, Susannah Streeter, previously addressed the dangers.
“On top of being incredibly volatile, most cryptocurrencies are unregulated, which not only adds another degree of uncertainty but also leaves investors vulnerable to fraud,” she said.
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