Loopring Shuts Down DEX and AMM After TVL Collapse and Rising zkEVM Competition
AI Market Summary
Loopring has discontinued its DEX and AMM services, shutting down its relayer amid collapsing TVL (~99% drawdown from 2021 peaks) and competitive displacement by zkEVM-based L2s. The halt in trading services and planned batched asset returns signal an operational wind-down, underscoring adoption and product-market-fit constraints for non-EVM zk rollups. The news is directly negative for LRC and may weigh on sentiment toward smaller L2 tokens.
Impact level
● Medium
AI InsightAI Insight
▼ Bearish
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Loopring has discontinued its decentralized exchange (DEX) and automated market maker (AMM) services, citing weak long-term user growth, limited business expansion, and mounting competitive pressure from next-generation Ethereum scaling networks.
The team said on Platform X that all trading has been halted and the protocol relayer has been shut down. Loopring, once best known for its zero-knowledge Rollup technology, acknowledged that its current architecture lacks virtual machine functionality, reducing composability and limiting real-world use cases such as payments.
Loopring attributed the closure to three main factors: insufficient user adoption, constrained business development capacity, and competition from zkEVM networks. It added that although substantial resources were directed toward R&D, the project failed to build a durable business foundation. Rather than continuing to operate what it described as a "shell" service, the team opted for a full shutdown.
User funds will be returned in batches. Loopring said it will calculate each user's final balance and then transfer remaining assets directly to the user's Ethereum wallet, with the team covering all associated gas fees.
The decision follows a steep decline in activity. L2Beat data show Loopring's total value locked (TVL) peaked at about $760 million during the November 2021 bull-market high, before sliding to roughly $8 million, down nearly 99%. LRC has also fallen from a record high near $3.75 to around $0.01.
Loopring partnered with GameStop in 2021 to support the retailer's NFT marketplace, which launched in 2022. As Ethereum-compatible zkEVM networks have matured rapidly, Loopring's more specialized design has steadily lost competitiveness.
The announcement also noted that LRC was delisted from exchanges in 2026, accelerating the platform's wind-down. Separately, RootData estimates that by 2026 more than 60 crypto projects or protocols had already ceased operations, with Pyra, Carrot, and Botanix Labs among those that previously reported shutdowns or business cutbacks.
