Loopring has entered its shutdown phase. The Ethereum Layer 2 project said its DEX will stop all trading, while its relayer service will go offline at the same time. For users, the key point is custody of funds during the wind-down: the team said assets remain safe and will be returned directly, so users will not need to generate Merkle proofs to withdraw on their own.
Early design limits became harder to ignore
According to the team, Loopring’s original architecture did not include virtual machine support. That limited smart contract composability and constrained broader payment use cases. The project said those design choices made large-scale ecosystem adoption difficult over time.
The competitive picture also changed. As zkEVM systems moved closer to Ethereum smart contract compatibility, the edge once held by Loopring’s specialized architecture weakened. The team also pointed to external pressure, including the delisting of LRC by some exchanges in 2026, as one factor that pushed the project toward closure.
An early zkRollup name in Ethereum L2
Loopring was one of the earlier participants in the Ethereum L2 sector, built around zero-knowledge Rollup technology, or zkRollup. The project had long emphasized that users kept control of their assets while benefiting from 100% Ethereum-level security. That positioning gave it a notable place in the first wave of L2 development.
Loopring also said the zero-knowledge proof work it helped advance has continued through newer projects. The zkEVM segment is still expanding quickly, but verification systems are still being refined. Its shutdown highlights the pressure that newer execution models have placed on older L2 designs.
Refund plan covers ETH, ERC-20 tokens, and AMM positions
For the asset return process, Loopring said it will publish a final balance list covering ETH, ERC-20 tokens, and AMM liquidity pool positions. AMM positions will be converted automatically into their underlying assets before distribution.
The team expects the full distribution process to be completed within several weeks after it begins. In its announcement, Loopring thanked the community and said it hopes the zero-knowledge proof technology it helped push forward will continue through other projects.