Loopring, the first project to launch a zero-knowledge rollup on Ethereum, has announced that its decentralized exchange will immediately stop all trading services. The relayer has already been taken offline.

The team said the decision was made with regret after years of trying to keep the platform operating.

Outdated Technology and Poor Adoption

According to the announcement, one of the main reasons behind the closure was the platform’s technical limitations. Loopring said its early zkRollup design did not include a virtual machine, which limited composability and prevented broader real-world applications, including payment use cases. These restrictions hindered ecosystem growth and made it difficult for the platform to compete with newer technologies.

The team also admitted that it had stronger engineering capabilities than business development skills, while describing itself as “engineers at heart, not business operators.” In addition, the delisting of LRC from major exchanges in 2026 added further pressure to the project.

“We poured countless late nights into building the very first zkRollup on the market. That achievement still fills us with pride. But today, we must face reality and announce, with deep regret, that Loopring DEX will cease all trading services effective immediately.”

Loopring explained that newer zkEVM solutions, which support Ethereum smart contracts and offer broader compatibility, have surpassed its specialized architecture. The team said its technology now feels outdated and that shutting down the service was preferable “rather than running a hollow service.”

The company stated that user funds remain safe and announced a distribution process to return assets. Instead of requiring users to submit Merkle proofs through the original self-custody withdrawal mechanism, Loopring said it will handle the entire process itself and cover all transaction fees. The team acknowledged that this method is more centralized but described it as the simplest option for users.

Loopring also revealed plans to publish a complete list of final account balances over the coming days. This includes spot holdings and liquidity pool positions, which will be converted into underlying tokens. A two-week review period will allow users to verify balances before distributions begin.

Loopring Hack

In June 2024, attackers stole an estimated $5 million from users of the Loopring wallet who relied solely on the platform’s Official Guardian service for account recovery.

The breach was traced to a flaw in the service’s two-factor authentication system, which allowed attackers to impersonate wallet owners and gain access to their accounts.

Source: CryptoPotato