- 0x (zero exchange) is an open-source platform to build DeFi products with faster and cost-efficient trading.
- It provides core building blocks for DApp development along with exchange on Ethereum.
0x is a decentralized exchange that provides ERC20 protocol-based tokens to be swapped over the Ethereum network. It possesses various functionalities and benefits that make it a developer-centric platform. Integrated API suite feature makes crypto trading, trading history, token registry, and powerful web3 app development easy. Meanwhile, it uses its own Ethereum ZRX token for trading fees and other actions within the platform.
What Is 0x Protocol?
Zero Exchange protocol is designed to work seamlessly by providing the core building blocks required for powerful application development. This platform is a publicly accessible and open-source project which is permissionless and easy to build on with governance. It also provides a peer-to-peer (p2p) exchange of tokens based on the Ethereum blockchain.
It provides public infrastructure instead of an application that strives to develop a complete decentralized exchange (DEX). It aims to enable all the flexibility of blockchain while addressing the flaws of traditional exchanges. Assets based on ERC20 protocols can be easily exchanged over Ethereum blockchain by using this protocol.
How Does It Work?
This platform prefers smart contracts over a shared architecture. It combines two strategies, automated market makers (AMMs) and state channels. This helps in reducing the platform’s limitations. State channels take offline transactions which reduces costs associated with transactions that take place on the Ethereum blockchain.
Automated market makers further introduce a third party to leverage trades when a crypto asset’s price reaches a threshold limit. These AMMs make trades across two parties that further act as a counterparty. The developer team or founders defines this platform as an on-chain settlement along with an off-chain order relay. By this, any developer can build their own crypto exchange and later post it on-chain.
How 0x Disrupts Traditional Methods?
Cryptocurrency exchanges normally follow existing centralized trading models. Because of that, they act as gatekeepers providing the framework and acting as connecting bridges to leverage trade across parties. Coinbase, like large cryptocurrency exchanges, is one of the best examples of this architecture.
This platform’s model needs customers to have trust in their funds with exchanges. While this model has worked for equity markets, an increasing number of innovative ideas in exchanges put its crypto future in these markets. Decentralized trading systems are looking forward to mitigating these limitations.
About ZRK Coin
0x platform’s Ethereum-based token ZRX is used for decentralized governance. It’s often used as trading fees along with governance rights and upgrades in the platform. This allows ZRX holders to have the authority and proportionality to vote for the development of the platform over time. ZRX token’s current value is at $0.843/ U.S. dollar.
ZRX coin allows two main functionalities within the protocol. Initially, it was used as trading fees for booking services of Relayers. Later this coin was used for governance purposes, allowing the token’s owner decision-making of the platform on behalf of their holdings.
Conclusion
The 0x protocol has large numbers and a wide variety of projects built over it. It’s being widely used in the world of blockchains. This protocol provides its integration with an existing application to maximize its potential. Smart contracts are one of the several advantages this protocol offers to generate, process, send and receive data. This protocol strives to become an infrastructure that revolutionizes the existing finance system.
