Originating from lool (pronounced loul or lewl) which originates from lol. Loolz is one of many ways to express laughing out loud (lol) even when the msner (person1) is not actually laughing out loud and might only find the loolzful subject only mildly funny or just wants person2 who made the joke to shut up and leave the person1 alone. Many people presume that the msner who typed lool/loolz is suffering from ffs (fat finger syndrome) when really the msner said lool/loolz purely because it is much more Noahtacular to say lool/loolz rather than lol.
Gary-"Hey guys did you see Garry yesterday? Loolz!!!"
Garey-"O yeah, he fell in dog shit! Loolz!!!"
Garri-"OMFHSG!!! that was so FREAKIN funny!!!!!! LOOLZ!!!!!!!!!!!!!"
Garrii-"That was funny, loolz, but uhhh...not that funny. Lets start a new convo without Garri."
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