Updated: Dec 21, 2019
Decentralized trading, wherein the buyers and sellers are directly connected has become a very popular concept in the field of blockchain networking and cryptocurrency exchanges. 0x is one of the most popular and high profile examples of these exchanges. It is an open protocol that enables the developers to generate decentralized cryptocurrency exchanges, as a part of the Ethereum blockchain. 0x provides the foundation on which other decentralized exchange platforms can be developed and built.
This guide will talk about the reason 0x was designed, the team behind it, the way it works, and the most popular applications.
What Is 0x Designed For?
0x was designed to provide an open decentralized protocol that facilitated the cryptocurrency exchange. On the 0x network, developers can construct their cryptocurrency exchange and post it. It uses a protocol involving the Ethereum smart contracts, which allows users and developers around to world to participate in decentralized exchange.
0x aims at providing an efficient and secure platform to exchange tokens. It is intended to be different from both the traditional centralized and decentralized exchanges, combining the best features of both platforms.
In a decentralized exchange platform, the tokens are traded using smart contracts. However, the abundance of tokens and the contract types results in confusion and scalability. 0x provides a platform that attempts to reduce this problem of scalability, by building on the existing Ethereum smart contracts over a shared network.
Who Is the Team Behind 0x?
Will Warren and Amir Bandeali co-founded 0x, in October 2016. CEO Will Warren, and CTO Amir Bandeali, are both involved in smart contract research and development.
Other team members include numerous software engineers, blockchain engineers, graphic and product designers and business strategists with some worthy resumes. Further, the Ox project is getting funded by Pantera, Polychain Capital, Fintech Blockchain Group, Jen Advisors, and Blockchain Capital which shows the diversified range of interest in this platform.
How Does 0x Work?
0x is a decentralized platform allowing developers to build their cryptocurrency token, facilitating its exchange and setting up fees. It acts a lot like Craigslist, connecting all the different traders and never holding any of the tokens on itself. Further, it offers cross-platform liquidity between the users of different projects. It was conceptualized to represent every asset on the
Ethereum blockchain including stocks, gold, digital games, and fiat currencies.
Typical decentralized exchanges were developed to primarily resolve the issue of theft, prevalent in the centralized platform. However, the decentralized platforms themselves have other issues in it that they are slow, rigid, and inexpensive. In short, they cannot be worked on together. These are the issues that 0x improves upon.
0x maintains a standard protocol, which is applied to all the orders on the blockchain, thereby significantly reducing the transactional costs and improving speed. It also facilitates the on-chain execution of off-chain orders, which further reduces the transactional speed.
The 0x Ethereum token is known as the ZRX. This token is used by users to pay Relayers’ trading fees. The users can make improvements on the protocol network proportionate to the amount of ZRX owned by them.
What are Current and Future Applications of 0x?
The 0x protocol adds an infrastructural layer to the existing Ethereum blockchain, making it more versatile and flexible. This added layer aids in the easy tokenization of assets, adding network liquidity to any asset or product.
In the future, the 0x protocol can be used to add a layer to stable coins enabling lenders to use them as collateral for loans. Decentralized loans formed with the 0x protocol, are currently in the testing phase. Some of the other Dapps that use 0x as the base are:
This enables free organization and collaboration without any boundaries or intermediaries, aiming to create a global community.
This uses blockchain to streamline and make work or payments globally accessible. It uses the blockchain network to eliminate any obstruction to the recruitment and payment process, involving both workers and employers.
It is a digital asset lending platform, which uses 0x to provide margin lending, decentralized lending, and short selling on the Ethereum platform.
Other projects that utilize 0x include Paradex, Emoon, and Radar among others. 0x, therefore, has a very varied user application base ranging from asset lending to gaming and the field of digitization. It can be said that the 0x protocol has the potential to become the future of cryptocurrency exchanges. given its ingrained flexibility.