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How 0x (ZRX) Works & Features of Token Trading Protocol

A quick navigation of the crypto world can be quite daunting especially with the usage computing and technological jargon which are unfamiliar to most people. This can be confusing if you are still very new to this side of the planet. However, with the right guideline, you can manage to understand wholly what each cryptocurrency entails. You just need to find the right sources of information.

In our case, 0x (zero ex) is an open source protocol which is designed for the decentralized exchanges on the blockchain of Ethereum. 0x is striving to create a protocol which uses the smart contracts offered by Ethereum. This protocol should help any interested party to run decentralized exchanges around the world. Actually, the team behind 0x believes that in the near future, thousands of Ethereum tokens will be available and a platform will be needed where exchanges can be made effortlessly without needing a third party trust.

Having that brief insight on 0x, this article will be aimed at analyzing the history and founders of 0x coin, its market performance, advantages, features, wallets all in the name of enhancing your understanding on this cryptocurrency.

History and Founders of 0x Project

The co-founders of 0x were Will Warren and Amir Bandeali in the year 2016. Both are great enthusiasts and of developmental research and smart contracts. The two envisioned a world where all assets could be represented in form of tokens on the blockchain of Ethereum. This included;

  • Fiat currencies
  • Digital gaming items
  • Gold
  • Stock

The tokenization processes would be aimed at leading thousands of the tokens which will be requiring to be exchanged in a platform that doesn’t require trusts. Although we have seen the effort of decentralized exchanges to this issue, they still present a few inefficiencies and what is referred to as lack of operability between these decentralized exchanges platforms.

The main objective of 0x is to create a standardized protocol to be implemented on the blockchain of Ethereum. This will enable the blockchain to trade the Ethereum tokens and anyone will have the ability to operate this decentralized exchange. The parties who will be building on the 0x will be known as Relayers as they will be hosting off the order books and service fees for the blockchain.

0x being a protocol, the allocated team also came up with a product to favor the consumers known as 0x OTC that incorporates the protocol set aside. The 0x OTC product uses the peer to peer exchange present in the Ethereum Tokens without having to use a Relayer. This works as long as you have the ability to directly connect with a certain counterparty. This is available on Kovan which a test network by Ethereum. Here anyone can always generate their order and then broadcast it simply by sending a link to their counterparty.

The fact that the order can be relayed from off the blockchain, the link can be sent using an alternative method which depends on the user’s preference. It can be through the email, twitter or even on writing materials.

Understanding 0x Cryptocurrency

The cost of 0x crypto – The main purpose of 0x cryptocurrency is to protect users from transaction fees simply by reducing the reliance of users on the blockchain. This leaves a window of opportunity where 0x can charge transaction fees. However, it does not charge for any protocols conducted on this platform. It is entirely free. There are people called Relayers who have a chance of charging fees in the same platform though. These are people who choose to come up with decentralized crypto exchanges using the same protocol.

Tokens – The Tokens used at 0x are generated from Ethereum. They are known as the ZRX which are mainly sourced to pay fees incurred during trading with the services provided by Relayers. All in all, the ZRX tokens have a more decentralized purpose. This is governing the protocols used at 0x system upgrade. This means that if you own ZRX Tokens, this gives you the authority to have a say which is equal to the holdings you have. This concerns any improvement suggestions to the protocol over a certain period of time.

Resilience to Decentralization – Take into consideration an investment platform. Ethereum, known as DAO (decentralized autonomous organization) has made it clear that decentralization does not mean that a certain crypto is secure from attacks. This was due to its hack attack. To clarify on the issue of resilience, the founder of 0x Will Warren, said that this firm will be using 100% of the money gathered from investments made and token sales in order to create open source tools for software that will support the infrastructure of this ecosystem.

0x competition – 0x looks very promising and will very soon bring in a big slash especially with its list of ambitious investors. The 0x is aiming for hegemony of the decentralized exchanges. This is because others like Maker, iDec, Delta, Ether and Shapeshift are already on their game face to provide similar functionality to the investors of the crypto world.

This shows how much digital economic systems are so different from the traditional ones. In that, the traditional systems of economy are driven mostly by reduction in prices and high efficiency. Soon enough, the decentralized exchanges world will have only one of those.

Further comparison of 0x to the centralized exchanges, the likes of GDAX, Gemini, Kraken shows that a well-crafted exchange that is decentralized moves the liquidity to a specific place. This attracts the users without having to face risks of centralization that the likes of Mt Gox suffered.

In conclusion, 0x might be the logical step people have been looking for in order to move away from the flaws decentralized cryptos have in their exchanges. The 0xis quite versatile and it avails the whole protocol easily. This being the case, the dream of 0x succeeding is not far-fetched. It could actually grow very fast and provide a basic stepping stone for some of the already existing exchanges like Ethereum blockchain.

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Noor Najam

Contributes guest posts to BlockPublisher with industry analysis & news in the blockchain space. Email: editor.opinions@blockpublisher.com

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