Expert Tokenization Methods for ICO/IEO/IDO in Loopring

# Expert Analysis: Tokenization & Launch Methodologies in the Loopring Ecosystem ## Executive Summary Loopring's approach to token launches has undergone a fundamental transformation from its pioneering **Initial Wallet Offering (IWO)** model in 2021 to a pure infrastructure-focused strategy following the July 2025 DeFi business sunset. The current advanced methodology leverages Loopring's zkRollup technology for gas-efficient ERC20 trading while requiring projects to handle token deployment and liquidity management externally. The ecosystem's future lies in cross-chain expansion through Base and Taiko integrations rather than native launchpad functionality. ## Evolution from IWO to Infrastructure Focus **Historical IWO Model (2021):** Loopring introduced the **Initial Wallet Offering** as an L2-native alternative to traditional IDOs. This innovative approach allowed users to participate in vetted token sales directly from their Loopring Smart Wallets with several advanced features: | Feature | Implementation | Advantage | |---------|----------------|-----------| | **Direct L2 Participation** | Users subscribed to token issuances without leaving Layer 2 | Eliminated gas costs for participants | | **Vetting Process** | Projects like DAOSquare's $RICE were curated by Loopring | Reduced scam risk for investors | | **Integrated Ecosystem** | Trading competitions and liquidity mining post-launch | Built immediate liquidity and engagement | | **Smart Wallet Integration** | Single-click participation from self-custody wallets | Superior UX compared to traditional IDO platforms | The IWO model represented a significant advancement in token launch methodology by combining the security of self-custody with the efficiency of Layer 2 settlement. However, this approach was sunset alongside Loopring's broader DeFi business restructuring in 2025. [Chain Bulletin](https://chainbulletin.com/loopring-introduces-initial-wallet-offering-iwo) ## Current Advanced Tokenization Methodology ### Core Technical Approach With the DeFi shutdown completed July 31, 2025, Loopring's current token launch methodology focuses on infrastructure utilization rather than native launch services: **1. ERC20 Deployment on Ethereum L1** - Projects must deploy tokens on Ethereum mainnet following standard ERC20 specifications - No native token creation tools within Loopring ecosystem - Traditional security auditing and compliance requirements apply **2. Layer 2 Migration via Deposit Mechanism** - Once deployed on L1, tokens can be deposited to Loopring's zkRollup - Deposit process: ~60k gas cost (approximately one-time fee) - Assets become available for gas-free trading on Loopring's L2 DEX **3. Liquidity Provision Strategies** - **Orderbook Integration**: Utilize Loopring's Relayer API for high-performance order management - **AMM Pools**: Create liquidity pools with 0.3% fee structure (0.2% to LPs, 0.06% protocol fee) - **Custom Relayer Setup**: Projects can operate their own relayers for specialized market making ### Technical Requirements Table | Component | Specification | Note | |-----------|---------------|------| | **Token Standard** | ERC20 on Ethereum L1 | Must be deployed before L2 integration | | **Gas Cost** | ~60k gas for initial deposit | One-time cost per token type | | **Trading Fees** | 0.02% for AMM swaps | No gas fees for subsequent trades | | **Throughput** | 2,000+ trades/second | zkRollup scalability advantage | | **Settlement** | Instant on L2 | Finality on Ethereum via zkProofs | [Loopring Protocol Documentation](https://docs-protocol.loopring.io/) ## Strategic Outlook: Cross-Chain Expansion Loopring's 2025 strategic pivot has positioned cross-chain integration as the primary growth vector for token projects: **Base Network Deployment (Q1 2025):** - Loopring DeFi services expanded to Base network - Enables token projects to reach Base's growing user base - Shared vision of "bringing a billion users onchain" **Taiko Integration:** - Loopring services available on Taiko L2 - Additional ecosystem for token distribution - Enhanced bridging capabilities between networks **Fast Bridging Infrastructure:** - New trusted bridge options implemented in 2025 - Loopring DeFi on Taiko L2 → Ethereum L1 - Loopring L2 → Ethereum L1 - Loopring L2 → Taiko L2 This cross-chain approach allows token projects to leverage Loopring's trading infrastructure while accessing multiple ecosystems' user bases. [Q1 2025 Update](https://medium.com/loopring-protocol/loopring-quarterly-update-q1-2025-d575ea85ae23) ## Risk Assessment & Data Caveats **Critical Limitations from 2025 Shutdown:** | Impact Area | Consequence | Mitigation Strategy | |-------------|-------------|---------------------| | **No Native Launchpad** | IWO model discontinued | Use external launch platforms + Loopring for trading | | **Wallet Service Closure** | Reduced user onboarding options | Rely on GameStop Wallet and other L2-compatible wallets | | **DeFi Feature Sunset** | No Dual Investment, Portal, or Block Trade | Focus on core DEX functionality only | | **Cross-Chain Complexity** | Multiple network management required | Utilize Loopring's bridging infrastructure | **Protocol Fee Structure (Still Active):** - 20% of L2 transaction fees allocated to protocol rewards - Distribution: 80% to LPs, 10% to insurers, 10% to DAO - Fees paid and distributed on L2 (monthly, automatic) - Only LRC and ETH distributed (other tokens converted) [LRC Tokenomics V2](https://medium.com/loopring-protocol/lrc-tokenomics-v2-1e6fd99e9e9c) ## Expert Recommendation **For Projects Considering Loopring Integration:** 1. **Infrastructure-First Approach**: View Loopring as trading infrastructure rather than launch platform 2. **Cross-Chain Strategy**: Plan for Base and Taiko deployments alongside Ethereum mainnet 3. **Relayer API Utilization**: Develop custom market making using Loopring's high-performance orderbook system 4. **Gas Optimization**: Structure token economics around one-time deposit costs vs. perpetual gas savings **Current Best Practices:** - Deploy token on Ethereum L1 with proper auditing - Deposit to Loopring L2 for gas-efficient trading - Provide liquidity through AMM pools and orderbooks - Leverage GameStop Wallet integration for user onboarding - Utilize cross-chain bridges for multi-ecosystem presence ## Conclusion Loopring's token launch methodology has evolved from an innovative but resource-intensive IWO model to a lean, infrastructure-focused approach. While the 2025 DeFi shutdown removed native launchpad capabilities, the core zkRollup technology remains a powerful tool for projects seeking gas-efficient trading infrastructure. The future of tokenization in the Loopring ecosystem lies in cross-chain expansion and API-driven liquidity solutions rather than managed token sales. Projects should approach Loopring as a performance layer for trading rather than a comprehensive launch platform, complementing it with external token sale mechanisms while leveraging its superior settlement infrastructure for post-launch trading efficiency.