Deep Dive Project Analysis — 0x Protocol (ZRX)
By: Amrit Mirchandani
Tags: Fintech, Blockchain, Cryptocurrency, Ethereum, Bitcoin

Relayer model

Instead of an exchange model, 0x relies on a relayer model. Creating and operating an exchange is a costly affair while on 0x anyone can become a relayer by hosting and propagating an order book that consists of generic messages. Relayers do not execute orders but simply signals the market participants and the taker executes her own trades.

Shared liquidity

Relayers can share their orderbooks and thereby increase the liquidity of the entire network with a standard API while still charging a fee for the transactions that get ‘taken’ through their order books. This ensures network effects are in favour of the relayers.

Open

0x is completely open source and even the smart contracts governing the network are open source and the only way they can be changed is by adding or forking the existing smart contracts. This makes sure the DApps do not get disrupted and can rely on the core platform.

Exchange protocol for DApps

0x provides a pluggable architecture for DApps that require token exchange on the fly. So anyone who is building DApps that utilise their own ERC-20 tokens will find liquidity and market exchange / trading of Ethereum and their token on their platform.

Team

0x has a team that would be the envy of any crypto project. Led by Will Warren and Amir Bandeali, this well rounded team of engineers, researchers, product and operations folks is guided by some big names in the crypto industry including Co-Founder of Coinbase — Fred Ehrsam, Founder of Polychain Capital — Olaf Carlson-Wee, Co-CIO of Pantera Capital and Founder of Augur — Joey Krug and Founder of Scalar Capital — Linda Xie.

DApps on 0x

A project that is relatively new, 0x is attracting the community of developers more than anything else. There are already several DApps built or being built on 0x protocol. Apps like dYdX, Request Network, Aragon, Augur and District0x demonstrate the power of 0x Protocol. In a crypto world where everyone is focused on listings and partnerships, this team is busy building a product and a community of developers that will power the next generation of DApps on the Ethereum blockchain.

Roadmap / Product development

0x’s amazing team has been delivering more than promised and earlier than promised. In the past year, developer trust has increased tremendously and in the latest update in July 2018, they released version 2 of the protocol.

Another thing that was fascinating is the extensive documentation. This shows that they are not only building something themselves, they have accounted for all those developers who will be building on top of 0x platform.

Conclusion

In a world that runs on tokens, apps will require conversion from one token to another on the fly and as more assets will be tokenised, currencies, digital goods and traditional assets will have to be traded on a platform that provides a trustless and open platform that is truly decentralised and governed by code. That is what ZRX or 0x is building.

This is one of the few projects that is building a layer of technology that will drive crypto and blockchain closer to mass adoption — or in popular crypto terms, tokenise the world.