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Loopring, widely recognized as Ethereum’s first zk-rollup project, announced Sunday it is shutting down its decentralized exchange immediately, with the relayer going offline at the time of the announcement. The team cited a structural inability to compete with newer zkEVM networks and a persistent failure to attract users.
Loopring’s Early Rollup Design Could Not Match zkEVM Rivals
Loopring’s original design lacked a virtual machine, which meant the protocol could not support composable smart contracts or broader DeFi integrations.
The team said that constraint kept the ecosystem from growing and made it impossible to build the payment use cases that would have driven adoption. As zkEVM-based rollups fully compatible with Ethereum smart contracts matured, Loopring’s specialized architecture became increasingly obsolete.
“As the first zkRollup, we lacked a virtual machine — no composability, no real-world payment use cases,” the team wrote in an X post. “That limitation kept our ecosystem from growing.”
The team described themselves as engineers rather than business operators and acknowledged they never developed the skills or appetite for business development.
LRC exchange delistings, including from Upbit and Binance earlier in 2026, added external pressure that the team said “only accelerated the inevitable.”
Funds to Be Returned Directly With Gas Fees Covered
Rather than requiring users to generate and submit Merkle proofs, Loopring said it will distribute remaining assets directly to users’ Ethereum wallets in batches and cover all associated gas fees.
The team will publish a full list of final Layer 2 balances in the coming days, including spot balances and AMM positions. A two-week review period will follow before distributions begin. Only accounts with a final balance of at least $10 will be included.
TVL Falls 99% From Peak as LRC Trades Near Record Lows
Loopring’s total value locked has fallen from a November 2021 peak of approximately $760 million to roughly $8 million, according to DefiLlama data, a decline of nearly 99%. LRC dropped 4.24% to approximately $0.012 following the announcement, roughly 99% below its all-time high of $3.75 set in the same month.
The DEX closure completes a broader wind-down that began in 2025, when Loopring retired its DeFi products including Dual Investment and Portal, and then shuttered its wallet service.
CEO Steve Guo stepped down in August 2025. Loopring raised $45 million in a 2017 token sale and helped lay the groundwork for the zkEVM networks that ultimately surpassed it, including zkSync, Scroll and StarkNet.
“Rather than running a hollow service, we choose to end it gracefully,” the team wrote.
