Transparent Tokenized Trading: What Is the 0x Protocol in Crypto? 

Decentralized finance (DeFi) dismantles reliance on centralized intermediaries, but building a flexible, user-friendly crypto trading interface isn’t easy. As more developers migrate to the blockchain ecosystem, they sometimes need a helping hand transforming DeFi dreams into decentralized applications (dApps). The 0x protocol is one DeFi application hoping to help establish the ground rules for stress-free, peer-to-peer (P2P) swapping, regardless of the tokens traders want to exchange. 

With its reliable and shared decentralized trading services, 0x is on course to propel adoption and innovation in decentralized trading, which has more and more traders monitoring the 0x coin price. 

The 0x protocol’s history

In 2016, mechanical engineer Will Warren partnered with professional trader Amir Bandeali to develop a P2P token exchange standard on the Ethereum blockchain. This idea formed the basis for the 0x protocol, which Warren and Bandeali explained in their 2017 white paper. A few months following the white paper’s publication, the 0x team released its proprietary cryptocurrency, ZRX, in an initial coin offering (ICO), raising $24 million from crypto traders. 

In July 2017, the first version of the 0x protocol launched on the Ethereum blockchain, offering P2P token swapping capabilities with tokens following the ERC-20 standard. With the 0x version 2 upgrade in 2020, the protocol expanded its services to include swapping indivisible non-fungible tokens (NFTs) on the Ethereum blockchain.  

Beyond 0x’s token-swapping infrastructure, it now offers multiple APIs and a launch kit to help third-party developers integrate with the crypto ecosystem. Programmers working on the 0x protocol continue proposing improvements (aka ZEIPs) and updates through the platform’s decentralized governance portal. 

How does 0x work?

Instead of hosting a standalone decentralized exchange (DEX), the 0x protocol offers open-source tools for developers, businesses, and individuals to create a DEX or offer decentralized trading services effortlessly. The trades in 0x’s system take place offchain between “makers” and “takers” who interact with node operators known as “relayers.” The “maker” sets the parameters for a trade—including the type of asset they want to buy or sell and how much—while takers fill the other side of a maker’s request if it fits their specifications. 

Relayers facilitate the P2P swap between makers and takers offchain for incentives paid in ZRX, but only the final transaction confirmation posts on the official Ethereum blockchain. 0x protocol uses automated smart contract commands to transfer data between offchain and onchain sources, removing the risk of third-party intermediaries. By taking transactions offchain, the 0x protocol reduces congestion on Ethereum’s mainnet, decreasing average fees and increasing transaction throughput. 

0x offers tools like its launch kit to give developers the frameworks they need to build their own DEX applications. The 0x protocol’s APIs also provide a seamless way for clients to link their applications with 0x’s DEX infrastructure, instantly accessing its offchain order book model and liquidity throughout the Ethereum ecosystem. 

0x protocol FAQs

What is the ZRX token? 

“ZRX” is the ticker for 0x protocol’s native cryptocurrency, built on the Ethereum blockchain using the ERC-20 token standard. In 0x’s framework, ZRX is a reward incentive for relayers to maintain accurate order books and execute trades between makers and takers. ZRX also carries voting rights on the 0x protocol’s decentralized governance platform, giving token holders the right to approve or deny upcoming upgrade proposals. To find the 0x coin price, traders search “ZRX” or “0x price” on crypto exchanges or price aggregators to see the latest 0x price chart. 

Does the 0x protocol only work on Ethereum? 

Although 0x started on Ethereum, it has since branched out to other blockchains, including Polygon (MATIC), Avalanche (AVAX), and Arbitrum (ARB). 

Who uses the 0x protocol? 

Because 0x is a suite of DEX tools rather than a standalone DEX, it attracts activity from a wide range of individuals and institutions interested in P2P swapping. Besides traders and relay operators, many third-party DeFi developers, fintech businesses, and crypto custodians use 0x’s services to bring decentralization to their applications. 

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