0x (pronounced ‘zero-x’) is a decentralized exchange, which allows users trade different types of Ethereum tokens. A decentralized exchange is different from a centralized exchange because it does not rely on a third-party service to hold the customer’s funds. Decentralization is getting a lot of attention these days, simply because it guards against a single point of failure.
0x is a protocol on the Ethereum blockchain that uses Ethereum smart contracts for its operations. The founders of this protocol envisioned a world where every asset can be rendered as a token on the Ethereum blockchain— including stocks, fiat currencies, digital game items and gold. These tokens will lead to a system that is based on a ‘trustless’ exchange.
An Overview of 0x
The problem that 0x is trying to solve is big when you look at the larger picture. For cryptocurrencies to be widely adopted, it must be trusted worldwide. These hacks and heists are significant and make virtual currencies look undesirable to new comers. The main idea of the 0x decentralized exchange is to ensure that all trade takes place within the blockchain where money is secure.
The project will move Ethereum forward as the leader of tokens and smart contracts and possesses some noteworthy features:
1. 0x uses smart contracts and a business logic that can be upgraded without disturbing the market.
2. The protocol offers its users privacy, where they are not required to reveal their personal details to anyone. Disclosure can occur if the transaction involves bank transfers—in this case only your counterparty will see your identity.
3. The protocol is open and free to use because there is no need for revenue generation to improve the protocol (just like the Ethereum system).
4. 0x is based on the “trustless” nature of decentralized systems. Users are not required to trust the honesty or security of an exchange since funds are held in their personal wallets and not by third parties.
5. Version 1 of 0x protocol was put through a rigorous testing process and security audits.
More Efficient Trades
All assets represented as tokens can be traded efficiently. By combining the strengths and avoiding the weaknesses of the centralized and decentralized exchanges, 0x will use off-chain order relays and on-chain settlements to make trade more efficient. Until the actual exchange of tokens, all the operations will be done off-chain.
A Secure Alternative
Centralized exchanges are vulnerable to hacks, security breaches and downtime at various times. While decentralized exchanges are known to be slow in order posting, canceling and actual trading. These inefficiencies bloat the Ethereum blockchain and are the security loopholes which the 0x protocol will help resolve. ERC20 transactions between users will be secure, free, trustworthy, and quick with Ethereum smart contracts.
0x Uses Relayers
Decentralized coin exchanges are a major step forward. 0x aims to create a conventional protocol that allows trade of Ethereum tokens by anyone. The parties who build on the 0x protocol are known as ‘Relayers’. They can manage orders and charge fees for their services.
0x OTC
Since 0x is a protocol, a consumer facing product called 0x OTC was built to access the protocol. 0x OTC is a P2P exchange system that trades Ethereum tokens without using Relayers.
Anyone can generate and broadcast orders by sending a link to their counterparty. Because the order is transacted outside of the blockchain, the link can be sent by any method such as emails etc.
0x Token
ZRX is 0x’s own Ethereum token and is used to pay Relayers trading fees for their services. It also has another function, which is decentralization— so that the amount of ZRX you own gives you a proportionate say in how the protocol can be improved over time.
0x Coin Exchanges:
Poloniex
Liqui
EtherDelta
HitBTC
Mercatox
0x Wallets
ZRX tokens became available for purchase on August 15th, 2017 and only buyers who have successfully registered with a controlled Ethereum address can purchase these tokens. You can’t register or buy ZRX using an exchange such as Coinbase, GDAX or Poloniex.
Your registered Ethereum address does not have to be funded with ETH when you register. User controlled Ethereum wallets supported are:
• Ledger hardware wallet
• MetaMask extension for Chrome
• Parity wallet
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