Protocol Fees

For every trade settlement, Loopring DEX operators will pay the protocol a tiny protocol fee (0.02% maker, 0.04% taker), exacted from the tokens being traded.

DEX operators can stake LRC in a particular way to get a protocol fee discount, or completely remove it. This is referred to as the 3rd staking type in this post about LRC utility.

Protocol fees are unrelated to whatever trading fees DEX operators may charge their users — that is a business decision for them. The protocol fee is simply an operational cost paid to the open protocol, which ultimately feeds into the Loopring and LRC ecosystem in the following manner:

All protocol fees will be converted to LRC, then,

10% burned

20% allocated for a future Loopring DAO

70%, the staking rewards, is to reward users who staked LRC for more than 90 days

Staking Rewards

Users receive LRC rewards proportional to their accumulated points. For example, imagine there are only two staking users, Alice, and Bob. Alice has staked 10K LRC for 6 months and Bob has staked 5K LRC for 8 months, the total reward will be split to them as:

Alice：10*6/(10*6 + 5*8） = 60%

Bob：5*8/(10*6 + 5*8） = 40%

The points are the product of the amount of staked LRC and the average staking period of each token. The earlier and more LRC a user stakes, the more he/she will get out of the staking rewards.

Whenever a user claims his/her staking reward, all the user’s points will be cleared (reset) to maximize the user’s return. All claimed LRC reward (plus the original amount) would then be staked automatically, locked for a minimum 90 days.

Golden Staking Window

On the smart contract level, LRC staking does not have restrictions on the timing or the LRC amount. Loopring Foundation has already staked 10 million LRC through the following two transactions:

Loopring Foundation will stake even more LRC in February 2020. But before we do that, we would like to give LRC token holders a chance to stake LRC before us, so they may take advantage to accumulate more points per token. We call the period from now to the end of January the golden staking window.

Importantly, the amount staked from the 2 txs above came from Loopring’s Ecosystem Advancement Fund (LEAF). Starting February 2020, though, the LRC we stake will not come from LEAF, but the allotment of the Loopring team itself. This portion, representing 20% of the total supply, was locked for 2 years — from inception of LRC until September 2019. Two months ago, it began vesting on a monthly schedule, which lasts 2 more years (1/24th vested monthly). However, we have not and will not be withdrawing the vested LRC to sell it — we are locking it further in the v3 staking contracts, a testament to our faith and commitment to the protocol and LRC holders.

How to stake?

Below we use etherscan.io to demonstrate how you can stake LRC. You can also use MyEtherWallet or MyCrypto.

Step #1

Visit the LRC contract: etherscan.io/address/lrctoken.eth#writeContract, and click “Connect to Web3” to unlock your wallet using MetaMask.

step #1

Step #2

Fill in the approve function form with 0xF4662bB1C4831fD411a95b8050B3A5998d8A4A5b as the value of _spender, and the amount of LRC you want to stake (with 18 extra 0’s) — the example below staked 12,345 LRC. Then click “Write” to sign and send the transaction. Wait for 1 confirmation. (Note, this address you are calling the spender is the LRC staking contract itself, i.e. the one in step #3)

step #2

Step #3

Visit the LRC Staking contract *this is a different contract than above*: etherscan.io/address/stakingpool.lrctoken.eth#writeContract, and unlock your same wallet again as in step #1, if necessary.

Visit the *this is a different contract than above*: etherscan.io/address/stakingpool.lrctoken.eth#writeContract, and unlock your same wallet again as in step #1, if necessary. Step #4

Fill in the stake function form with the same amount you used in step #2, click “Write” to send another transaction, then wait for 1 confirmation.

step #4

Step #5

That’s it. To verify you did it correctly, visit etherscan.io/address/stakingpool.lrctoken.eth#readContract, and fill in the getUserStaking function form, input your Ethereum address and click “Query”. You will see the amount of LRC you have staked in total, and the time you need to wait (seconds) before you can claim LRC reward, the time you need to wait (seconds) before you can withdraw staked LRC, and the current reward. Remember token amounts have an extra 18 0s after.

step #5

We know a UI that handles this behind the scenes would be nice, and we will certainly build one. More than likely, so too will the DEXs themselves that build on Loopring as a convenience to users. For now, however, given it is early days for v3, and the first platform to launch (WeDEX) is only gearing up, it is not a top priority. When the volume starts rolling, it will become one.