Learn more about 0x: How, where, why (and why not) to buy.
0x is a completely open source and permissionless protocol designed to work with ERC20 tokens.
Some of its most compelling features are:
- Off-chain orders. It lets ERC20 tokens be traded on the Ethereum blockchain with reduced gas costs and blockchain bloat.
- Standardisation and ease of use. It offers standardised APIs, a well developed programming library and thorough documentation for ERC20 developers to create smart contracts and similar.
The 0x Protocol used the ZRX token to offer transfer and storage of value across multiple ERC20 projects, execute transactions on the 0x protocol and to act as a common token.
What does this mean? For starters, that you might be able to seamlessly spend ERC20 tokens interchangeably across a wide range of projects.
Where to buy 0x (ZRX)
How does 0x work?
One of the main applications of the 0x protocol is for the creation of decentralised smart contract-operated exchanges. This is necessary to mitigate the risks of theft or misconduct found with centralised exchanges.
But there are several problems with that idea.
- The gas costs of creating, cancelling and adjusting orders on exchanges will quickly add up.
- There are challenges with maintaining enough liquidity across each exchange (especially with the above costs).
- Unexpected changes in one place might have unexpected results elsewhere.
0x aims to solve these problems with:
- Off-chain functions to reduce the gas costs and blockchain bloat.
- Standard APIs that allow for aggregate pools of liquidity across different exchanges.
- A modular system that allows for upgrades of individual components without unduly affecting other components, or disrupting existing markets
0x is already used by a range of different exchanges. Many of the exchanges that carry out smart contract-facilitated trading are already using 0x.
Should I buy 0x ZRX?
0x is explicitly designed to enable cross-chain functionality among multiple ERC20 tokens and to act as a common unit of exchange among them where needed.
The token itself is used to pay the nominal relayer fees, and the exceptional utility and wide use of the 0x platform may see demand for the token grow from there.
Other than that, you might imagine ZRX as a generic unit of currency which can be freely traded for others at current rates. By its nature, ZRX trading is probably going to be largely automated and done on an as-needed basis.
The 1 billion coin supply limit (of which 500 million are in circulation), next to its utility and wide use, suggests that it still has a lot of room to grow.
It’s worth considering the potential for growth in cryptocurrency as a whole, and the number of ERC20 tokens that have yet to launch but will almost certainly be using the 0x protocol in the future.
Even if/when the Ethereum blockchain finds a way to drop its gas costs to negligible levels, 0x’s potential to bridge ERC20 tokens might still find it being widely used.
ZRX might be a relatively safe token, but it may not see the same explosive growth as other tokens. And if it does you might want to find out why, because someone either abruptly dropped a lot of money into it or something exciting just happened elsewhere.