Ring Miners: Contributing to Grin Network Security

Ring miners are network participants in the Loopring protocol who manage order rings and ensure that trades are completed for all parties involved.

What are ring miners?

Loopring is an Ethereum-based exchange and payment protocol that implements a new consensus mechanism. In order to avoid traditional registries and AMM mechanisms that manage liquidity pools, Loopring uses network participants known as ring miners.

Ring miners facilitate orders by filling them before they can be completed or cancelled.They are paid for their services in the form of LRC tokens.

Ring miners are essential components of the Loopring network. They are associated with fulfilling orders using order rings to earn rewards for their service.

There are two types of rewards that ring miners receive:

  • Rewards in the form of a Loopring token (LRC) generated by the platform. In this case, the user creating the order specifies the maximum number of LRC tokens that will be paid to the ring miner as a service reward.
  • Rewards in the form of a split-margin, which is deducted from the total amount of a particular order. When placing an order, the user can also specify the portion of the margin that can be claimed for a specific order.

The decision to choose between the fee and the margin is left to the miners.

The reward system at Loopring is designed to help miners get adequate financial rewards for the services they provide. The system is based on an incentive system whereby miners look for the best exchange rate deals in order to get the best margin or service fees for themselves.

Finding the perfect trades also ensures that users get the most value for their traded cryptocurrencies, making it a win-win situation for both parties.

Loopring’s smart contract can be used to determine how to fill an ordered ring when the ring miner executes it. When an order is filled on either side of the transaction, there is a direct transfer from the smart contract to the user’s wallet. Order rings also make ring matching possible. Based on the ring mapping, order execution is completed, linking them together and allowing multiple trades to be executed simultaneously. Order rings distinguish Loopring from other DEX like Waves or Banco.

Let’s imagine we have an imaginary order to help better show these methods in action. Karina, Mark and Dane are interested in a deal on the Loopring network. In exchange for two HNTs, Carina wants to get 10 ADAs, Mark wants to trade 21 VETs for 1.5 HNTs, and Dane wants to trade 20 ADAs and 40VETs. Different types of ring comparisons can be used to combine these offset orders into one order ring, where Carina exchanges with Mark, Mark exchanges his VET with Dane, and Dane gives his ADA to Karen. Everyone gets their desired coins after this ring order is approved by the Loopring smart contracts.

The Loopring order split will process the leftovers, which will then be filtered into another order ring until each incomplete order is completed to a full order.

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