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Loopring, an Ethereum-based project using zkRollup technology, has announced the closure of its decentralized exchange and AMM. This decision was made following a thorough analysis that revealed that the project's continued existence was no longer viable from both an economic and technical standpoint.

The developers state that the primary reason for this closure is a fundamental architectural issue that arose early in development. The protocol lacks a virtual machine, making it impossible to deploy fully functional smart contracts compatible with the Ethereum mainnet. While the entire industry was rapidly transitioning to zkEVM solutions that provided full compatibility and support for complex decentralized applications, Loopring remained in its own isolated ecosystem. This severely limited its usability and integration with other services, leading to a loss of users to more flexible platforms.

Besides technological limitations, the project team also recognized the lack of a viable business model. The protocol's revenues did not cover operating expenses or provide resources for further development. The situation was exacerbated by the delisting of the LRC token on several major cryptocurrency exchanges in 2026. This event not only reduced the asset's liquidity but also undermined investor confidence, worsening the already challenging financial situation.

Statistics eloquently demonstrate the scale of the regression. In November 2021, at the peak of the bull market, the total value locked (TVL) in the protocol reached $760 million. Currently, this figure has fallen to 8 million, a more than 90-fold decline. The price of the native LRC token also reflects the depth of the crisis: from a peak of $3.75, it fell to $0.01 by the time the shutdown was announced.

Despite all the difficulties, the Loopring team has committed to ensuring an orderly shutdown process for users. All remaining funds will be settled, and assets will be gradually transferred to user addresses on the Ethereum mainnet. Transaction fees will be covered by the protocol to minimize losses for end holders.