While we are super excited about the product launch, we admit that the current implementation is far from being perfect at the UX level. We want to be as transparent as possible by sharing some information with our potential users so they know the risks and roadmap they may face when using the DEX. We especially want to highlight our technical challenges and overall readiness, our fee schedule, and the differences between our zkRollup-based DEX, layer 1 DEXes, and centralized exchanges (CEXes). We also highlight a reward program and trading competition.

Challenges and Readiness of our Technologies

The DEX is the culmination of three significant components:

the Loopring protocol (smart contracts & ZK circuits), the Relayer cluster, the React web application.

Loopring Protocol

We have the most confidence in the Loopring protocol. The latest version truly reflects our experience and lessons learned in smart contract development and testing over more than two and a half years. SECBIT has thoroughly audited the smart contracts and ZK circuits.

There are still things we can improve, including:

Use a more modular design to ease future development and testing;

Optimize the current ZKP library (libsnark) for better prover performance, which is an ongoing effort, and our Chief Architect, Brecht Devos, will have some exciting preliminary results to share soon.

Adopt a new ZKP library for universal trusted-setup or one that doesn’t require trusted-setups at all.

Beta1 has a capacity limitation of 1 million users. Once we get close to this limitation, we’ll need to do another trusted-setup to increase the capacity to maybe 64 million users. The current 1 million capacity limitation is chosen to reduce prover cost. Now that we have more prover data from production, we are confident that increasing the capacity limit to 64 million will only increase prover cost by 10–15%, which can be offset by the optimization effort mentioned above.

There are many features we want to implement, such as fast withdrawals and peer-to-peer layer-2 transfers/payments. But optimizing the core functionalities and cost reduction is still our focus.

In general, we believe the current version of the Loopring protocol is robust and is ready for ‘small’ DEXes (1 million users), but not for large ones yet.

Loopring Relayer

The relayer cluster for a zkRollup system is more complicated than we initially expected, and that’s why it took so long for us to develop one. Our focus for the relayer are throughput and cost-per-trade. Our relayer can now support 100 trades-per-second (TPS) consistently, and once we get the Merkle tree update operation parallelized, the performance can be further improved. (The Loopring protocol can support 2,025 TPS; the bottleneck is the relayer). The current cost-per-trade is about $0.0025 USD, and we are extremely confident that we can bring it down by optimizing both the relayer and the prover. Results to share on this shortly.

Because of the relayer cluster’s complexity, we will need more time to automate relayer upgrade and token listing processes.

We are also working on improving our relayer’s API and documentation. We’ll try to release the documentation within a month. But if you want to use our API, do let us know, so we can inform you right as they are released. The lack of API documentation is a reason we don’t have any market makers aboard at launch, but we do have a base level of liquidity internally.

DEX Web-App (Loopring.io)

The current web-app only works with MetaMask. We are not thrilled it is not designed for the masses just yet. Our long-term goal is to offer a smart wallet as a mobile app and seamlessly integrate our DEX backend into the smart wallet. Smart wallet + DEX will provide users both a better experience and security guarantees.

That said, the experience is surely satisfactory, and we will keep improving the web application for a better trading experience throughout 2020. As of now, it still has more than 40 GitHub issues to be taken care of, mostly UI. We’ll release improvements on a daily basis.

If you feel we should add more features or you’ve found a bug, please submit an issue. We’ll appreciate your feedback and have a reward program (see below).