I've been doing research lately looking for ways to buy ETH tokens without paying high ETH gas fees. It's worthwhile to bother, because tokens that aren't yet on a centralized exchange (CEX) have the most upside potential. They always do double digit multiples one listed on a CEX. So the time to get them is when they are still on only DEXs.
I just started using Loopring DEX. It's a layer 2 solution, so you have to first deposit your funds onto Layer 2. I did just 1 ETH for testing. The tx took less than a min. and cost the equivalent of $12.36.
Once on the platform, each purchase took a second and had no ETH gas fees. I'll probably pay another $12 or so if I want to withdraw back to Layer 1 for any reason, so since I'll have more tokens I'm moving then (not just ETH) that could be considered the ETH fee in that case. There are also low trading fees paid to the DEX itself.
What Really Works on There
The key thing about trading on Loopring is that there isn't necessarily sufficient liquidity for every pair you see listed there. For some it's so thin it won't allow the trade. For some it will allow the trade, but I wouldn't recommend it because the price impact is 2-5% for using even just .25 ETH. I don't want a single trade to move the price that much! I feel like I can't get out of the trade easily if I do that.
The marginal tokens on there in terms of liquidity were AAVE, COMP, GRID, PNK, RPL & UNI.
The ones that you can freely trade without affecting price (at least when doing only 1 or 2 ETH at a time) are currently: YFI, CEL, BEL, DPI, ENJ, LINK, LRC, WBTC, MCB, MKR, and NIOX.
RFOX just launched a Liquidity Provider special reward period starting today, so clearly they are wanting to get into the “enough liquidity on Loopring” club, and probably will now. If you’ve already got some, or are willing to buy some elsewhere and move it onto Loopring, you’ll probably get some sweet rewards.
I decided to buy YFI, NIOX, and BEL and provide liquidity for one of them with the balance of the ETH I moved there. Not much. This was all just an experiment. It also cost me nothing to provide liquidity!
By the way, both Autonio (NIOX) and Bella (BEL) are interesting projects I only discovered during this testing research. Take a look at both if you're interested in novel DEFI solutions. You can learn more about BEL at bella.fi and learn more about NIOX at autonio.foundation
Mobile Wallet (not free)
If you get the Loopring mobile wallet you buy an ENS name for your address (like yourname.Loopring.eth) for $180 and can then stake LRC for a share of platform fees.
Or outside their wallet, with an app like Metamask or wallet connect, you can provide liquidity and get a share of fees that way, but you can't just stake LRC for a share of all fees. You get a share only of fees on that specific trading pair. Currently about 11%. The two tokens I bought give returns of more like 200% from LP. Plus right now there are those extra Liquidity Provider rewards for both NIOX and RFOX.
More Success Details
There is a 0.03 ETH withdrawal fee for withdrawing LP liquidity, which is a significant amount if you don't put funds in for a long enough period of time.
Here’s my referral code for this exchange that gets us both discounts when you sign up with it. You get about 4% of your fees back and I get about the same. It's exchange.loopring.io/invite/25325
Are you familiar with any of those projects? If so, please share more in the comments.
How about Loopring? Have you been using it?
I'm now favoring tokens I can get there, if I'm going to buy ETH tokens at all and not just stick with Polkadot enabled projects.
