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Loopring aims to implement a decentralized exchange protocol with a hybrid order model with a focus on liquidity. Loopring introduces two novel tools that can increase liquidity: order ring and consortium blockchain.

Order ring is a method of chaining multiple orders that execute each other. It’s up to relayers and arbitragers to find rings and execute them. On the protocol level, Loopring equally distributes margins between orders and prevents rent-seeking by adding redundant orders to the ring.

Relayers can cooperate by sharing liquidity. Loopring offers a way to do that by creating a consortium blockchain. This blockchain is fast (1-2 second block time) and supports history pruning. Relayers decide whether they want to join the consortium, make their own pool, or not to share liquidity at all.