What Is The 0x Protocol?

[TL; DR]

0x Lab is a San Francisco-based technology development firm. It is the developer of the 0x protocol.

0x protocol is an open-sourced and decentralized exchange infrastructure launched in 2017.

You can exchange, trade, and swap tokenized assets across multiple blockchains using the 0x protocol.

0x protocol enables the trading of ERC 20 tokens and allows you to carry out the peer-to-peer exchange of assets on the Ethereum blockchain.

The native token of the 0x protocol is ZRX.

ZRX token holders can vote on protocol changes and earn liquidity rewards in Ether (ETH) by staking their ZRX token.

Some weaknesses of the 0x protocol include long-term sustainability, lack of interaction with fiat currency, and inconsistent liquidity.

Keywords: 0x, protocol, blockchain, open-source, decentralized, tokenized, token, liquidity.


[Full Article]

The blockchain network is so robust that there are no limits to what you can build and deploy on the network. You either follow a prototype that has been produced by other developers before or bring your new idea to life.

Whatever strategy you are deploying in your app development, the market is wide enough for you to attract your investors. Big brands, individuals, and enthusiasts are looking for intuitive apps and making investments.

One of those rare kinds of blockchain apps is the 0x protocol. You might wonder why the 0x protocol is considered rare.

Not to worry, we shall identify the 0x protocol, its unique features, and other essential details about the protocol.

Let's begin.


The 0x protocol

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The 0x protocol, as in “Zero x,” was launched in 2017 by 0x Lab. The 0x lab is based in San Francisco and focuses on creating smart markets for the 0x ecosystem.

0x protocol is open-sourced and decentralized. It is a blockchain app built for decentralized exchange infrastructure. It enables the exchange, trade, and swap of tokenized assets on multiple blockchains.

The use cases of the 0x protocol are numerous. Blockchain developers can use the protocol to incorporate exchange functionalities into their applications, while market makers use the 0x protocol to create a trading platform for cryptocurrencies and tokens.

0x is built for trading ERC 20 tokens. You can carry out the peer-to-peer exchange of assets on the Ethereum blockchain using the 0x protocol.

The native governance and staking token of 0x is ZRX. ZRX is an Ethereum ERC-20 token. Holders of the ZRX token can vote on protocol changes and earn liquidity rewards in Ether (ETH) by staking their ZRX token.

The 0x protocol is built to facilitate an open standard and common building block. It will also drive interoperability among decentralized apps ( Apps) that incorporate exchange functionality.

Like every decentralized App leveraging the blockchain, this peer-to-peer exchange platform has its weaknesses. At the launch of every blockchain App, developers and critics get hold of the App and dissect it.

By dissecting, they tend to identify the strength of such a protocol and its weaknesses compared to other similar decentralized protocols. Should the weaknesses tend towards the security features, it triggers the developers of such Apps to strengthen that protocol to prevent unauthorized access or attack from hackers.

At this juncture, we shall identify the Concerns and weaknesses detected by other developers and critics.


The Concerns About 0x Protocol

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The major concern raised about the 0x protocol is the long-term sustainability and the competition it faces from other decentralized exchanges.

Experts assert that for every blockchain protocol, long-term sustainability is essential. The more reliable the protocol is, the more investors and users it will continue to attract.

Consider a decentralized platform that has spent years building its patrons and holders of its native token, and it eventually crashes or could not stand the test of time? Such a platform fails the sustainability test, and investors will suffer the loss.

So to foresee and prevent such a scenario, blockchain developers and critics dissected the 0x protocol and realized that it has no long-term sustainability and faces intense competition from other Apps that share similar functions on the blockchain.

The second concern is that the 0x protocol has no direct interaction with fiat currency, and the decentralized exchange protocol is solely built for Ethereum users and ERC-20 token holders.

For such a decentralized protocol to have a wider reach and become prominent, it needs to look into the exchange feature and expand it to accommodate other native token holders who might want to exchange their token directly on such an intuitive platform.

Finally, the 0x protocol is prone to inconsistent liquidity and is characterized by slow transaction times. This criticism is synonymous with decentralized exchanges (DEX) platforms.

The time exhausted in exchange activities using decentralized exchange protocols like 0x App is slow. You have to be patient, depending on the enormity of the exchange.

Also, the market makers have to trade more native tokens of the 0x protocol to strengthen its liquidity. Most times, the trading drops, and the liquidity keeps fluctuating.

As earlier pointed out, ZRX is the native token of the 0x protocol, built on the Ethereum blockchain, that can be easily gotten.


How To Buy ZRX (0x project) Token

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To avoid being duped or unnecessary hassle, you should buy your ZRX token through a reliable and trusted global exchange platform like Gate.io.

The steps to buying your token on Gate.io are;

Firstly, you have to create an account on Gate.io. Once you provide the relevant details, you will receive a verification message that your verification process is successful and your account has been created.
Secondly, you will need to fund your Gate.io wallet or account with a mainstream token. Gate.io accepts mainstream tokens like BTC and USDT. You can now purchase the ZRX token using the funds in your account and start trading.
Lastly, you can trade ZRX with Quantitative strategies and Margin accounts. You have the privilege to deal with ZRX derivatives such as Perpetual contracts and ETFs.


Conclusion

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The 0x protocol is an advanced and smart decentralized exchange platform. Its ZRX token drives governance and is not mineable.

The 0x protocol is quite different from other decentralized exchange platforms leveraging blockchain technology, and the 0x protocol does not follow the centralized trading model.

The 0x protocol is built to serve as gatekeepers, provide the infrastructure and act as connecting agents, and they are to clear and facilitate trade and exchange between parties.

In addition, the 0x goal is to build infrastructure and make assets more accessible and more liquid. The protocol developer, 0x Lab, also prioritizes the empowerment of enterprising teams worldwide toward building a robust financial system.

The mission is to “create a tokenized world where all value can flow freely.”

Asides from the concerns raised by critics (discussed earlier), it has a long-term potential to become one of the foremost decentralized exchange protocols on the Ethereum blockchain.






Author: Valentine. A, Gate.io Researcher

This article represents only the researcher's views and does not constitute any investment suggestions.

Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.