What are Ring Miners?
Ring Miners operate within the Loopring program on Ethereum, overseeing the successful execution of each exchange. Loopring operates as an Ethereum-based exchange and payment protocol revolutionizing conventional trading approaches through a consensus mechanism. At its core are ring miners, pivotal participants in the Loopring network, responsible for executing orders using order rings and thereby enabling seamless trade settlements.
These miners are instrumental in bypassing conventional order books and automated market-making (AMM) mechanisms, ensuring quicker and more efficient order executions.
Ring miners play a critical role in the Loopring ecosystem, earning rewards in the form of LRC tokens or slip margins from order amounts. This incentivization system is designed to ensure that ring miners are adequately rewarded for their role in order ring executions, encouraging them to seek the most favorable exchange rates for better margins or fees. Loopring's smart contracts govern the execution of order rings, facilitating direct transfers between users' wallets when a trade can be executed.
Order rings, a distinctive feature of Loopring, enable the matching of multiple orders across various users, optimizing trade settlements and standing out from other decentralized exchanges (DEXs). The Loopring protocol ensures that incomplete orders are systematically filtered into subsequent order rings until all trades are satisfactorily completed, enhancing the efficiency and effectiveness of the trading process.
For instance, in a hypothetical scenario involving Karen, Mark, and Dane exchanging different cryptocurrencies, ring miners would use order rings to match these diverse orders, enabling seamless trades among the parties involved.
Ring miners are a type of people who participate in the process of verifying and adding transactions to a blockchain, which is like a digital ledger that keeps track of all the transactions made with a certain cryptocurrency.
Think of ring miners as people who help make sure everyone is playing fair in a game of sharing and exchanging digital coins. Just like how referees in a game make sure everyone is following the rules, ring miners make sure that every transaction made with digital coins is valid and properly recorded in the blockchain.
Ring miners are called "ring" miners because they form a "ring" of multiple people working together to verify transactions. This makes the process of verifying transactions more secure, because it's harder for one person to cheat or make a mistake when they're part of a team.
History of the Term "Ring Miners"
Around 2019, the term "ring miners" emerged alongside the launch of the Loopring protocol. Recognizing the need for efficient and secure trade execution within the decentralized exchange, the Loopring team introduced the concept of ring miners. These specialized network participants facilitate trades by creating and managing order rings, essentially orchestrating the matching and execution of multiple orders simultaneously. Since then, "ring miners" has become a recognized term within the Loopring community and the broader cryptocurrency space, signifying their crucial role in ensuring a smooth and efficient trading experience.