0x Project is one of the most ambitious and long-term planning enterprises in the crypto market. Why? Because they are envisioning the future when all forms of value will be tokenized on a blockchain. To trade them freely and securely, a protocol like 0x will be necessary. But how does 0x work now? What is ZRX and how to buy ZRX? How to exchange ZRX off the protocol? Why is ZRX growing again? We compiled all the information and ZRX news to answer these questions in this 0x 2020 guide.
What is 0x?
0x protocol is defined by the development team as a “liquidity API” on Ethereum. It can be described as a decentralized exchange (DEX) aggregator.
0x works towards the future of finance in which all kinds of value storage will be tokenized. In that scenario, a secure and reliable way to trade those assets will be needed. 0x Protocol over time is supposed to become just the right way to do it.
In terms of how the protocol works, a parallel with the global messaging system for banks SWIFT can be drawn. Just like this messaging standard, 0x protocol uses a universal set of rules for all exchanges participating in the protocol, enabling interoperability between various DEXs.
To understand it better, let’s see what was the starting point for 0x development in the following section of this ZRX manual.
A Brief History of 0x
The idea of 0x came from the need to cover the drawbacks of contemporary centralized exchanges and DEXs alike. While centralized exchanges needed trust of a user, like the current financial system, DEXs at that time were slow and illiquid. In addition, they rely on block times and incur transaction fees. So, a solution in a form of a standard protocol for orders that needed blockchain only for settlement started being developed.
0x was co-founded by Will Warren and Amir Bandeali in October 2016. Warren studied mechanical engineering in UC San Diego, and Bandeali took care of the economic side of the project. Over the years, the core team grew to more than 40 people in offices all over the world, the developer teams work united by the ZeroEx Intl. company.
What did they develop and how exactly the project works? Find the explanation in the next section.
How does 0x Protocol work?
Off-chain order relay + on-chain settlement
In every 0x trade, there is a maker (the address who created the order) and a taker (the address that accepts the order and fills it).
- Maker allows the decentralized exchange (DEX) contract to access their balance of Token A;
- Maker creates an order to exchange Token A for Token B, specifying a desired exchange rate, expiration time (beyond which the order cannot be filled), and signs the order with their private key;
- Maker broadcasts the order over an off-chain medium, for example, dApp UI;
- Taker finds the order and decides that they would like to fill it;
- Taker allows the DEX contract to access their balance of Token B;
- Taker submits the maker’s signed order to the DEX contract;
- The DEX contract authenticates the maker’s signature, verifies that the order has not expired, verifies that the order has not already been filled, then transfers tokens between the two parties at the specified exchange rate.
Staking in 0x Protocol
As of 2020, the reward model has been reworked. The news 0x team will make ZRX more attractive to stake in v3 caused the price to increase. Let’s see why.
To incentivize liquidity providers, the 0x protocol has a staking system in place. In 0x v3, every taker pays a small fee that is ‘attributed’ to the maker address.
Every epoch (a period of 7 days), all protocol fees are accumulated into a unique pool. At the end of the epoch, all rewards are automatically distributed to staking pools based on a formula.
Though only ZRX tokens can be staked in the protocol, the rewards are paid out in ETH. More on ZRX specifically and the ZRX news can be found further in this 2020 0x guide.
What’s the difference between centralized exchanges and 0x?
As was previously mentioned in this ZRX manual, the protocol was developed because of several major drawbacks of centralized exchanges.
- The main source of revenue for centralized exchanges is fees. Actively trading can become a costly affair;
- Centralized exchanges have to comply with laws to operate, as a result it can incur regional restrictions and shutdowns;
- Centralized exchanges also rely on their users’ trust in the safety of their funds and personal data.
0x is not a direct competitor of centralized exchanges, because they can offer fiat on/off-ramps and cater to the users who are not comfortable with managing their private keys. Decentralized exchanges often require a bit more expertise than centralized exchanges as well.
0x is neither a DEX itself nor a centralized entity. Nevertheless, it uses a token to power some of the platform’s functions. Read on to learn more about ZRX!
What is ZRX?
ZRX is the native ERC-20 token of 0x protocol.
Like many other coins, 0x Project held an ICO (token presale) to raise capital. ZRX was being sold for approximately $0.05 a token and collected $24 million.
ZRX entered the markets in August, 2017 and quickly rose to the current ATH of $2.53 by January. In 2018, there were three significant spikes in the price. In April-May the price rose to $2 for a few days, then after the announcement of 0x v2 testnet it rebounded again to $1.25. Then in September, after the news ZRX token would be listed at Coinbase, the price spiked 35% but then as suddenly fell to $0.3 and finished the year in the same price range.
2019 was less profitable for investors, as the price was in downtrend pretty much for the whole year. Until May, 2020 the price did not exceed $0.35 but in the light of ZRX news about v3 of the protocol, it jumped to $0.4 and started the uptrend which is still lasting.
At the moment of writing this ZRX manual, the total market cap of the token is $476,234,069 (Rank #35). Since there are 720,082,673 ZRX in circulation, a single token is worth $0.661360.
If you want to know how to buy ZRX, read the guide until the end!
How to use ZRX?
As of this 2020 0x guide, ZRX token has two primary use cases: protocol governance and staking.
The Exchange contract is versioned and governed by ZRX token holders (ZRX can be used to vote on ZEIPs (ZeroEx Improvement Proposals). Voting is free but by the end of a voting session, the account balance has to stay the same.
0x liquidity providers are entitled to receive rewards in exchange for their activity, which is crucial for the good functioning of 0x markets. Market makers are encouraged to create staking pools and ZRX owners can stake their tokens with those pools and receive a cut of this reward.
Want to know how to exchange ZRX? Read the manual until the end!
Are there any controversial 0x news?
0x protocol started in the same way many other crypto projects in 2017 began: with an ICO. At that time, it was the most common form of fundraising on the crypto market. However, in order to have an ICO, there has to be a token that is supposed to be used in the ecosystem. The criticism of 0x Project was not everyone saw the point in introducing a token into the ecosystem.
Originally, ZRX were used exclusively in voting and for the market fees. However, the data showed that for the $447 million exchange value, only $2,000 (0.0044%) of the fees were paid in ZRX. The perceived lack of necessity for the token even led to a fork of 0x Protocol called Hydro Protocol, which wouldn’t use a token at all.
Since then, in the latest iteration of 0x Protocol, the governance model and the role of ZRX token were reworked, and now work as was described in the previous sections, so these criticisms are no longer applicable.
What is the future of 0x Project?
0x team is known for shipping consistently, as it is one of their core values.
A month ago they launched Matcha, a user oriented DEX aggregator that connects them with liquidity providers in a simple way.
In the most recent developer update, the 0x team went through their plans for the nearest future. Among them are continuous updates to 0x API, integration with Augur (a prediction market protocol) v2.0, gas cost reductions and Portal revamp.
In the long term, since the 0x Project is built on Ethereum, it also depends on the developments in it. If Ethereum Foundation delivers on Ethereum 2.0, 0x ecosystem will also be in a much better position.
Another long-term goal for the team is the decentralization of governance. By now, the improvement proposals are already in the hands of the community, and the majority of voting power is distributed among the liquidity providers. In the future, though, the 0x team will stand back and contribute on equal terms with enthusiasts. The funding will also be transferred to a community fund from ZeroEx Intl. The funding will be used to pay for the work of developers and outreach.
What other 0x news are there? Read in the next section of our 0x 2020 guide.
ZRX News on Twitter
0x social engagement is moving up today with 2,843,969 total engagements over the last 24 hours. There have also been 1,298 social posts coming from 112 contributors. https://t.co/8nqCu1YYzr $zrx #0x pic.twitter.com/veggRFljqN
— ?LunarCRUSH Cryptobot? (@lunarcrushbot) August 22, 2020
The price action that 0x token was seeing caused an influx in ZRX news, which in turn increased the engagement with social media. Let’s have a look at what the users were talking about.
$ZRX has just hit a near 2-year high (last hit on Nov. 14, 2018) of $0.616, and the 45th ranked asset has climbed an impressive +18% in just 12 hours. Exchange inflow spikes have been good indications for #0x, and the most recent was a nice foreshadow. ? https://t.co/8xqb5GhBWU pic.twitter.com/xrLx3l8kr0
— Santiment (@santimentfeed) August 20, 2020
Media analytics portal Santiment illustrated how the increase of confidence in the 0x Project caused an increase of 18% virtually in a couple of days. Then the news ZRX came near its highest price since 2018 followed.
— The Cryptic Poet (@1CrypticPoet) August 21, 2020
A week ago, crypto-influencer The Cryptic Poet pointed out that some action in ZRX is brewing. A few days later, the ZRX news will prove him right!
Inverse correlation between dev teams at events and rapid, high quality production. 0x just keeps shipping.
One of the best in the industry at keeping the blinders on and building. https://t.co/ttriYFMcSM
— Ryan Selkis (@twobitidiot) May 16, 2018
Ryan Selkis of Messari is one of the early supporters of the 0x Project. In his words, the team is reliably producing updates to the protocol and keeps the stream of ZRX news steady.
How to buy ZRX?
If you own crypto, we highly recommend you to exchange it to get 0x token at ChangeHero. Why? Because not only it is quick and inexpensive, but also as easy as it gets! But first, let’s see what is the best cryptocurrency wallet to store them.
Where to store ZRX?
ZRX is a ERC-20 token, which means it is supported by most multi-currency wallets, as well as specialized wallets for ETH and ERC-standard tokens. Here are a few of suggestions from us:
- MyEtherWallet (MEW) is the go-to dedicated wallet for ETC tokens and ETH. It’s accessible on Web, desktop and mobile;
- Metamask is a browser extension and mobile app that combines dApp browser with a cryptocurrency wallet. With its UI, you can stake the ZRX tokens, too!
- Exodus Wallet is supported on desktop computers and mobile. In it you can exchange your assets with ZRX with the help of a built-in exchange function (powered by ChangeHero);
- For optimal safety of the funds, you can use a hardware wallet such as Ledger or Trezor. You can connect them to the wallets mentioned above. In Trezor Beta, you don’t even need any app to be able to exchange your coins stored on the device, because ChangeHero is integrated in it, too.
Exchanging in a wallet and on the website are pretty similar processes. Let us walk you through!
How to exchange ZRX?
Here is a very short instruction on how to exchange ZRX. You can do it easily in five steps:
- Choose the currencies on the home page, amounts and the type of exchange. Provide your ZRX wallet address in the next step and check the amounts;
- Send in a single transaction the sum of cryptocurrency you will be exchanging. In Fixed Rate transactions, you have 10 minutes before it expires;
- From here on, you won’t need to do anything. At this step we are doing all the work: checking the incoming transaction and doing the exchange as soon as it arrives;
- As soon as the exchange has been processed, your ZRX is on the way to your wallet.
Ran into something not covered in this ZRX manual? Our support Heroes can help you anytime. Reach them in the chat on the website or by email: [email protected].
0x Project is still in the very start of its long journey to the world where all value is tokenized. We will surely be looking forward to any ZRX news, and now you probably will, too! Especially now that you know where to find the latest 0x news and how to buy ZRX. Stay tuned for more by following ChangeHero’s pages on Twitter, Facebook, Reddit and Telegram!