0x is an open protocol that is designed to offer a decentralized exchange as part of the Ethereum blockchain. 0x is done through a protocol that involves smart contacts from Ethereum that allow people from all over the world to carry out a decentralized exchange. The team behind 0x firmly believes that, in the future, you will find thousands of chips from Ethereum and that 0x can provide an efficient and reliable way to exchange them. 0x is designed to be different from both centralized and decentralized exchanges, providing the best possible combination of features.
Who created the 0x project?
The co-founders of 0x are Will Warren and Amir Bandeali, the first of which is the CEO and the second of which is the CTO. Both are in the research and development of smart contracts. Warren used to do applied physics research at the Los Alamos National Laboratory after studying mechanical engineering at UC San Diego. Bandeali used to be a fixed-income trader at DRW after studying finance at the University of Illinois, Urbana-Champaign. Among the other team members, you will find blockchain engineers, software engineers, graphic and product designers, end-to-end business strategists and people with other skills. The project advisors founded or worked in companies such as Polychain Capital, Coinbase and Pantera Capital.
The 0x project is funded by the Fintech Blockchain Group, Panther, Polychain Capital, Jen Advisors and Blockchain Capital, showing a diverse range of interests.
What is the goal of 0x?
When Warren and Bandeali co-founded Project 0x in October 2016, they did so with the hope of a world that would allow the representation of each asset as part of the Ethereum block chain. Ideally, the assets included would have everything from digital gaming elements to stocks and gold and fiat currencies. With so much tokenization, there will be thousands of different types of tokens, which will require a reliable exchange for users. While the co-founders appreciate the developments of the decentralized exchanges, they saw an opportunity to improve. With 0x, they hope to address the inefficiencies of decentralized cryptocurrency exchanges, as well as the inability of several exchanges to work together.
What separates centralized and decentralized exchanges?
The exchanges of centralized cryptocurrencies are the most common and are executed by a single entity, which in turn offers a point of failure. The users of the centralized exchanges deposit funds directly with the exchange, and the exchange is responsible for connecting the purchase and sale orders in real time. Coinbase is an example of a centralized exchange. The great risk of centralized exchanges is their vulnerability to piracy or at the beginning led by the administrator.
Decentralized exchanges were developed to solve the problem of vulnerability to theft. With this type of cryptocurrency exchange, users maintain some control over their money. Instead of sending money directly to a wallet controlled by an entity, users rely on digital signatures to directly authorize trading orders. As expected, this means that while centralized exchanges are very fast, decentralized exchanges are slower. Centralized exchanges also tend to have high performance operations as well as advanced tools and are easy to use.
How does 0x improve in decentralized exchanges?
Project 0x is closer to a decentralized cryptocurrency exchange than a centralized exchange, but even then, it has notable differences. 0x addresses the main problems of decentralized exchanges: they are expensive, slow, without liquidity and can not be operated among themselves. To operate an order book in the block chain, each adjustment or new order is made through the chain of blocks, which means that everything is subject to lock times. This also results in network transaction fees in each interaction.
0x addresses both problems by developing a standard protocol. This protocol can be applied to all orders retransmitted outside the block chain. With the protocol, the orders have to return to the chain of blocks when they are solved instead of in each transaction. This significantly speeds up the process and eliminates some of the unnecessary transaction fees.
How much does 0x cost?
Since 0x will prevent users from having to pay transaction fees by reducing dependency on the blockchain, there is an opportunity for 0x to charge for its use. However, 0x does not charge fees of any kind for using its protocol; It’s free. However, keep in mind that if someone chooses to create a decentralized cryptocurrency exchange using the protocol, that person, known as Relayer, can charge fees.
What is 0x OTC?
In addition to the 0x protocol, the team also created 0x OTC, a consumer-oriented product that uses the 0x protocol. 0x OTC allows peers to exchange Ethereum tokens without requiring a relayer, provided they connect directly with the counterpart. It is live and simple to use. Send a link to your counterparty to generate and send your order. You can send the order as you wish, since it is transmitted through the chain of blocks. In this way, you can use pen and paper, email, social networks or any other method to send the order.
What are tokens 0x (ZRX)?
Another aspect of Project 0x is the unique Ethereum 0x token, known as ZRX. This token is the way in which users pay the operating fees of the Relayers. It is also a decentralized form of government for the 0x protocol update system. Essentially, those who own ZRX have input into the protocol and improvements to make it proportional to the amount it possesses.
There is a fixed supply of one billion ZRX, and the token was released on August 15, 2017. 50 percent of the tokens were released during the launch and 15 percent remained at 0x, the 15th percent went to the developer fund, 10 percent. going to the founding team, and 10 percent to the initial advisors and sponsors. The tokens assigned to the founders and advisors, as well as to the staff members, will be delivered over the course of four years, while those that were purchased during the launch event were immediately liquidated.
How to buy ZRX?
0x has become the sixth cryptocurrency that appears in Coinbase. The token was first included in Coinbase Pro, and is now also available in the normal Coinbase application.
ZRX is an Ethereum ERC-20 and, as such, can be stored in an Ethereum wallet or in a hardware wallet.
Conclusion
The 0x seems to be a logical step from the exchanges of decentralized cryptocurrencies, effectively taking care of many of the faults that these exchanges contain. Due to its versatility and easy protocol availability, it is no exaggeration that 0x grows rapidly, providing the basis for other similar exchange systems that use the Ethereum blockchain.
Also published on Medium.