Loopring has made significant progress on a new development plan of theirs called Block Trade which will connect self-custody wallets to centralized exchanges (CEX), providing additional liquidity to the Loopring network. 

Since the announcement on May 15th, the price of Loopring has been on a steady rise from $0.28 per token to $0.31. Over time, this valuation could continue to rise (so long as another major crypto collapse doesn’t happen again) due to the new liquidity pipeline created by Block Trade. 

Block Trade and centralized exchanges

Block Trade will give users the ability to swap tokens directly from their crypto wallets through centralized exchanges which is often not the case. Normally, users need to rely on decentralized exchanges (DEX) such as Uniswap or Sushiswap to make any sort of transaction on-chain. If users wanted to trade coins on a CEX, they would first need to send their assets to a custodial wallet provided by the CEX. 

Now, that requirement is being removed for users on the Loopring blockchain. After a series of relays and data exchanges between the two participants, funds can be migrated to a CEX where DeFi liquidity pools are unaffected by the swap. 

The introduction of CEX trading directly to wallet users on Loopring opens the doors for significant investment strategies as many of the DeFi liquidity pools on smaller blockchain networks like Loopring tend to be too small for major investment. 

Benefits for enterprise investments

Enterprise-grade investing is when a large business or entity takes part in a crypto investment strategy that is well beyond the means of ordinary retail investing. Companies like Figment.io have made significant advancements in this regard, creating staking opportunities for businesses looking to provide anywhere from $500,000 and upward in staking investments. 

By opening up access to CEX exchanges, Loopring is essentially prying the door open for more enterprise-grade investment on their blockchain which will help expand the network. With an influx of new liquidity, the development will be able to advance at a faster pace due to additional incentives and rewards brought on by the surplus assets. 

Safety in DEX pools

It is paramount to understand that the introduction of CEX exchanges for Loopring wallets will not adversely affect the status of DEX liquidity pools. This is because liquidity on centralized and decentralized exchanges operates separately. Therefore, frequent Loopring users will not have to worry about major investments or withdrawals from the CEX integration harming the health of the network. 

Instead, as liquidity comes in from the new CEX pipelines, DeFi pools will have the opportunity to expand even further as more crypto pours into the community. Furthermore, because liquidity is coming directly from a CEX, slippage can also be reduced which will help users save the small amounts of tokens that tend to get lost due to sudden price changes that occur during the middle of a transaction. 

As additional funding begins to pour in, Loopring will be one step closer to creating a scalable layer 2 network that can provide adequate support for NFT and DeFi development; and, although the project has been slow to acquire major attention, the addition of Block Trade could help the team at Loopring accomplish their goals more quickly.