Loopring is distributing funds directly to users and will cover transaction fees. Users don’t need to take any action.
Loopring, which was the first to introduce a zero-knowledge rollup on Ethereum, has announced that its decentralized exchange will halt all trading services immediately. The relayer is already offline.
The decision to shut down was made after several years of effort to keep the platform running.
Outdated technology and poor implementation
As mentioned in their announcement, the main reason for the closure was the platform’s technical shortcomings. Loopring noted that early zkRollup designs lacked virtual machines, which limited configurability and restricted a variety of real-world applications, including payment systems. These factors stunted the ecosystem’s growth and made it tough for the platform to compete with newer technologies.
The team acknowledged that while they considered themselves “engineers at heart, not business operators,” their technical skills outpaced their business development capabilities. Moreover, LRC’s delisting from major exchanges in 2026 further intensified the challenges faced by the project.
“We invested numerous late nights building the first zkRollup available, and we’re proud of our achievements. However, today we need to confront the reality and regretfully announce that Loopring DEX will stop all trading services, effective immediately.”
Loopring further explained that the new zkEVM solution moves beyond its previous architecture to accommodate Ethereum smart contracts, providing wider compatibility. The team stated that they now view the current technology as outdated and preferred to shut down the service “rather than operate a hollow platform.”
They reassured users that their funds are secure and outlined a process for asset distribution. Instead of requiring users to provide Merkle proofs through its original self-custodial withdrawal method, Loopring will manage the entire process internally while covering all transaction fees. While this approach is more centralized, the team reasoned that it is the simplest option for users.
Loopring also plans to share a complete list of final account balances in the coming days, detailing spot holdings and liquidity pool positions converted into underlying tokens. A two-week review period will be provided for users to verify their balance before distribution starts.
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Loopring hack
In June 2024, an estimated $5 million was stolen from Loopring wallet users who solely depended on the platform’s official Guardian service for account recovery.
The breach was traced back to a vulnerability in the two-factor authentication system of the service, which allowed an attacker to impersonate the wallet owner and gain access to their account.
