0x is a permissionless liquidity protocol built on Ethereum for creating decentralized exchanges, connecting liquidity providers and incentivizing market makers to fuel DeFi asset trading.

0x itself is not a decentralized exchange, simply the infrastructure for building decentralized exchanges and connecting liquidity providers across a range of sources. The protocol supports token exchanges for ERC20, ERC721, and other Ethereum token standards.

0x is a vital piece of infrastructure for the broader DeFi ecosystem as it enables developers and business to build products with native functionality to purchase and trade tokenized assets. The protocol is a modular system featuring a set of robust, audited smart contracts with extensible architecture that allows developers to plug their smart contract directly to the 0x API. 0x’s off-chain order relay paired with on-chain settlement creates a highly gas efficient design for peer-to-peer token exchange. 

The liquidity protocol has a wide range of use cases, including seamless trading of NFTs for blockchain-based games & collectibles, liquidity for tokens representing decentralized prediction markets, order books for the thousands of native utility tokens on Ethereum, lending markets, and stablecoins

Backgroud

0x was founded in October 2016 with the goal of providing a trustless exchange mechanism for the thousands of crypto-native tokens and other tokenized assets including fiat currencies, stocks, gold, and more. 

The 0x core team is distributed across the world with backgrounds in engineering, academic research, business, and design. The team is led by co-founder & CEO Will Warren and CTO Amir Bandeali. In addition to their diverse core team, the 0x team is accompanied by prominent advisors including Fred Ehrsam from Paradigm, Olaf Carlson-Wee from Polychain Capital, Joe Krug from Pantera Capital and Linda Xie from Scalar Capital. 

0x completed a token sale in August of 2017, raising $24 million in Ether (ETH) in less than 24 hours at a base price of $0.048 per ZRX. A total of 1,000,000,000 ZRX tokens were minted with the initial allocation as follows:

  • 50% to token sale participants
  • 15% for operation expenses
  • 15% as a developer fund 
  • 10% to the team vested over 4 years
  • 10% to initial advisors and private investors

Why 0x? 

Unlike Uniswap, Kyber Network and other major DEXs, 0x is not actually a decentralized exchange itself and instead is the infrastructure for building DEXs and other liquidity applications. DeFi users have likely interacted with 0x before without ever knowing it.

Some of the notable projects and other DeFi products leveraging 0x’s liquidity infrastructure includes: 

  • Nuo
  • Zerion
  • bZx
  • DeFi Saver
  • Radar Relay
  • ParaDEX
  • OpenRelay
  • 0x Instant

In addition to the above, one of the more novel products to emerge from the 0x camp is the 0x API, a DEX liquidity aggregator. With 0x API, developers to seamlessly aggregate liquidity from 0x Mesh, Kyber, Uniswap, and more in order to easily exchange tokens at the best price. Smart order routing splits up the users transaction across decentralized network, allowing the order to be filled with minimal slippage.

How Does it Work? 

At its core, 0x is a messaging standard paired with a suite of smart contracts. The protocol enables market makers to send messages off-chain with the order details (which token pair, the price, and expiration date).

Data is maintained in a token registry which serves as the official on-chain reference for settling transactions. 0x’s set of smart contracts validates signed messages from takers and executes the respective trade on-chain. 

0x is embedded with a native token, ZRX, to facilitate on-chain governance. 0x v3 also introduced a new staking mechanism for market makers to participate in governance along with earning ETH rewards in return for providing liquidity to the network. 

ZRX holders can also earn ETH by delegating their tokens to the market making pools, earning a pro-rata distribution on the rewards.  

ZRX is a fixed supply token with no emission type. As such, any new ZRX tokens that enter circulation are from the vesting periods defined at the ICO back in August 2017.

How to Get Involved? 

If you’re looking to learn more about 0x and its permissionless liquidity protocol, you can visit the official website here

Developers interested in building on top of 0x can visit the official docs here.

To stay up to date on the latest 0x developments and news, follow their official Twitter account or join their Discord. For more technical discussions, the official forum is also a great place to join in on the discussion! 

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