What is 0x Protocol (ZRX)?
0x —— Protocol For The Decentralized Exchange Of Tokens On Ethereum
- 0x protocol is an open-source protocol and enables peer-to-peer exchange of tokens on the Ethereum blockchain. Several projects have been developed on 0x, such as Radar, ParaDex, and DeversiFi.
- The 0x protocol is built on an off-chain order relay with on-chain settlement. Specifically, orders are signed and broadcasted on the blockchain, while settlement is done on the blockchain.
- Unlike Ethereum-built DEXs 1.0 (e.g., Oasis, IDEX), 0x protocol allows users to send and cancel orders without any associated gas fee, while maintaining the non-custodial feature of DEX.
- The 0x protocol allows interoperability between dApps, fostering the liquidity of networks through positive network effects.
- 0x has its own Ethereum token——ZRX, ZRX tokens are used for governance functions within the 0x ecosystem. They are also used by relayers to create liquidity pools.
0x Protocol Key Metrics
1. What is 0x Protocol?
0x is an open protocol for decentralized exchange on the Ethereum blockchain. It is intended to serve as a basic building block that may be combined with other protocols to drive increasingly sophisticated dApps. 0x uses a publicly accessible system of smart contracts that can act as shared infrastructure for a variety of dApps. 0x has its own Ethereum token, ZRX, which is used to pay trading fees to Relayers for their services.
Two types of users are needed to operate any 0x market:
- Makers – Those providing liquidity to the order book. Makers place orders on the exchange that do not trade immediately; rather, they wait for it to be matched.
- Takers – Those who take liquidity from the order book. Takers place orders that are instantly matched with existing orders.
2. Who is the founder of 0x Protocol?
0x was co-founded by Will Warren and Amir Bandeali in October 2016. In July 2017, ZeroEx Inc held a public sale in which it raised $24 million in ether in exchange for ZRX tokens. Support for the project came from venture firms, including Polychain Capital, Blockchain Capital and Pantera Capital, among others.
Advisors to the company include Coinbase co-founder Fred Ehrsam, Augur co-founder Joey Krug and Scalar Capital co-founder Linda Xie.
3. What makes 0x Protocol unique?
Compare with decentralized exchanges, which downsides to many existing decentralized exchanges are illiquid, slow, expensive, and inoperable with one another. For those operating order books on the blockchain, every new order or adjustment to an order goes through the blockchain. This means that they rely entirely on block times and incur network transaction fees for every single transaction. 0x tries to solve for these inefficiencies by creating a standard protocol of orders being relayed off of the blockchain and only having them brought back onto the blockchain when the order needs to be settled. 0x doesn’t charge any fees to use the protocol but anyone who decides to build a decentralized exchange on top of the protocol can decide to charge their own fees.