0x (ZRX) is an open-source protocol built on the Ethereum blockchain, designed to enable seamless peer-to-peer exchange of digital assets. It aims to create a future where all types of assets—including traditionally illiquid ones like real estate—can be tokenized and traded without intermediaries.
By using smart contracts, 0x allows users to trade assets directly, reducing costs and increasing transaction speed. For instance, property ownership could be tokenized and transferred through a secure smart contract, eliminating the need for lawyers or escrow agents.
Anyone can build a decentralized exchange (DEX) using the 0x Launch Kit and even charge fees for their services. The protocol also offers an API that aggregates liquidity from various sources, ensuring users get the best available prices for token swaps.
How the 0x Protocol Operates
0x uses smart contracts to facilitate decentralized trading. These contracts are publicly accessible and can be integrated into any decentralized application (dApp). Unlike many DEXs that execute all transactions on-chain—incurring gas fees for every action—0x uses a hybrid model.
Orders are broadcast off-chain through relayers, which act like bulletin boards. Users can submit orders signed cryptographically, and settlement occurs on-chain only when orders are filled. This approach minimizes gas fees and reduces network congestion.
0x also supports point-to-point orders, where trades are limited to specific participants. In all cases, assets remain in users’ custody until the trade is finalized, enhancing security.
The Founders Behind 0x
0x was co-founded in 2016 by Will Warren (CEO) and Amir Bandeali (CTO). Will studied Mechanical Engineering at UC San Diego and previously advised the Basic Attention Token project. Amir holds a Finance degree from the University of Illinois and worked as a trading specialist.
The core team is based in San Francisco and includes 32 members with diverse expertise. Advisors include Fred Ehrsam (Coinbase co-founder) and Joey Krug (Pantera Capital). The ZRX initial coin offering (ICO) in August 2017 raised $24 million within 24 hours.
Key Features of 0x
0x stands out due to its off-chain relayer technology, which allows faster and cheaper transactions compared to fully on-chain DEXs. It supports a broad range of assets, including ERC-20 tokens and non-fungible tokens (ERC-721).
Beyond DEXs, the protocol can be used for OTC trading, digital marketplaces, portfolio management, and DeFi applications. Its flexibility and interoperability have led to widespread adoption.
The Value of the ZRX Token
ZRX is a utility and governance token. It rewards relayers with trading fees and gives holders voting rights on protocol upgrades. With a capped supply of 1 billion tokens, scarcity could influence its value.
The ecosystem grew significantly in 2020, reaching $5.7 billion in trading volume in January 2021 alone. Staking mechanisms allow ZRX holders to earn rewards by providing liquidity or delegating tokens.
Token Distribution and Supply
50% of ZRX tokens were sold during the ICO, with purchase caps to ensure broad distribution. The tokens are held across more than 13,000 Ethereum addresses.
10% was allocated to the founding team, 10% to early backers and advisors, and 15% to development funds. The current circulating supply is part of the total 1 billion ZRX max supply.
Technical Performance
The 0x API boasts 99.9% uptime, a 2% revert rate, and a 1.5-second response time. It often provides better-adjusted prices than competitors like Uniswap and 1inch.
Practical Applications of 0x
Users can trade ZRX tokens directly with others by sharing orders via email or messaging apps. Trades execute automatically when accepted. Alternatively, they can browse orders on relayers and confirm trades securely.
The 0x API integrates with wallets and DeFi apps, offering market-leading prices. It is used by projects like MetaMask, Matcha, and Zapper. Market makers and AMMs like Uniswap and Balancer supply liquidity to the ecosystem.
Over 50 DeFi projects, including 1inch, Opyn, and Gods Unchained, have built on or integrated 0x.
Selecting a Wallet for ZRX
Since ZRX is an ERC-20 token, it can be stored in any Ethereum-compatible wallet. Hardware wallets like Ledger offer the highest security for large holdings but come with a cost and learning curve.
Software wallets are free and user-friendly, available as mobile or desktop apps. Custodial options manage private keys for you, while non-custodial wallets store keys on your device. Online wallets are convenient but less secure, making them suitable for small amounts or active traders.
👉 Explore secure wallet strategies
Staking ZRX Tokens
Introduced in 2019, staking rewards market makers for providing liquidity. Rewards are proportional to the amount of ZRX staked. Users with insufficient ZRX can join staking pools to earn delegated rewards.
Conclusion
0x is driving the tokenization of assets, enabling frictionless peer-to-peer exchanges on Ethereum. Its hybrid off-chain/on-chain model reduces costs and congestion while maintaining security.
The ZRX token grants governance rights and staking rewards, encouraging network participation. With growing adoption and a first-mover advantage in decentralized exchange technology, 0x continues to expand its ecosystem.
Frequently Asked Questions
What types of assets can be traded on 0x?
0x supports ERC-20 tokens and ERC-721 non-fungible tokens (NFTs). This includes cryptocurrencies, digital art, and tokenized real-world assets like real estate.
How does 0x reduce transaction costs?
By handling order placement and matching off-chain, 0x minimizes on-chain operations. Only final settlements occur on the blockchain, reducing gas fees and congestion.
Can anyone create a decentralized exchange with 0x?
Yes, the 0x Launch Kit provides tools to build a custom DEX. Developers can charge fees and customize features to meet specific needs.
What is the role of relayers in the 0x ecosystem?
Relayers host order books and broadcast orders off-chain. They earn fees for their services but never custody user assets, ensuring security and decentralization.
How does ZRX staking work?
ZRX holders can stake tokens to earn rewards from protocol fees. Market makers and liquidity providers benefit directly, while others can delegate tokens to staking pools.
Is the 0x protocol audited for security?
Yes, all smart contracts are open-source and audited by internal teams and external firms like Consensys Diligence and Trail of Bits.