Loopring (LRC) Slides 20% In 5 Days Despite NFT Red Packet 2.0 Launch

Loopring (LRC) prices remain under pressure, dropping roughly 20% days after announcing the launch of non-fungible token (NFT) Red Packet 2.0.

Loopring Announces Red Packet 2.0

Loopring, a layer-2 decentralized exchange using zkRollups on Ethereum allowing traders to exchange assets, said NFT Red Packet 2.0, currently available on their Loopring Smart Wallet and the web app, let users transfer ERC-20 tokens and NFTs adapted to the ERC-1155 standard. 

Unlike the popular ERC-721 standard for building NFTs, the ERC-1155 version is more flexible, empowering users to create semi-fungible tokens and ordinary NFTs. 

Loopring developers started building Red Packets in 2021. However, developers expanded on traditional Red Packets creation when they also announced Blind Red Packets on April 20. 

Using this solution, users can only unveil the content of the “packet” after a given period. 

Supporters claim Red Packets will change the economics of NFTs and drive mainstream adoption while opening up more possibilities, especially in gaming, ticketing, and more, primarily because of the cost involved.

Unlike transacting on the Ethereum mainnet, using layer-2 platforms for trading or asset transfer is relatively cheap. 

Users can securely send assets, including tokens and NFTs, off-chain while avoiding the high fees. However, they still are secured by the Ethereum mainnet.

As an illustration, users on the mainnet have to pay $43.83 when writing on April 23. Meanwhile, based on L2Fees data, sending ETH on Loopring costs $0.06. 

Because of this allowance, users can pack thousands of NFTs on Loopring’s Blind Red Packets and gift them to users without having to pay high fees. It is an addition that the Loopring community has positively received, but that has not prevented prices from edging lower, as visible in the daily chart.

LRC Drops 20% In 5 Days

LRC is trading at $0.338, down 20% from April highs, and is underperforming Bitcoin and Ethereum in the past 24 hours. 

Notably, prices broke lower on April 19 before they were confirmed on April 20 and in the second half of last week. 

When writing, prices are stable but remain within a bearish formation, having reversed all losses posted on April 14. On this day, Loopring revealed that more than 200,000 unique addresses were using its platform.

Despite the contraction of LRC prices, the token has more than doubled from December 2022, when prices fell to as low as $0.188. The token is also up 30% from March 2023 lows as prices currently retest a critical support line.

Featured Image From Canva, Chart From TradingView