0x Protocol (ZRX)

About 0x Protocol (ZRX)

What Is 0x Protocol (ZRX)?

0x Protocol (ZRX) is a decentralized exchange (DEX) protocol that enables the permissionless, peer-to-peer trading of assets, particularly ERC20 tokens and other digital assets on Ethereum and across various blockchains. By leveraging a decentralized infrastructure, 0x eliminates the need for centralized exchanges and intermediaries, providing a more open, transparent, and secure way for users to trade assets.

0x Protocol (ZRX) accomplishes its decentralized exchange functionality through a collection of open-source, publicly auditable smart contracts. These contracts work together to create a flexible, low-friction trading protocol that developers can easily integrate into their applications, such as wallets, decentralized exchanges, portfolio tracking tools, and more.

The 0x protocol facilitates over $200 billion in trading volume since its inception, and the protocol is used by a wide range of developers and companies building web3 applications. You can track its usage through its dedicated explorer.

The protocol is powered by ZRX, an ERC20 governance token that allows holders to participate in the governance of the protocol, including decisions on protocol upgrades and community fund management.

Who Are the Founders of 0x Protocol (ZRX)?

0x was founded in 2016 by Will Warren and Amir Bandeali. Both of them continue to lead the platform today, with Will Warren serving as CEO and Amir Bandeali as CTO.

• Will Warren: Prior to co-founding 0x, Warren worked in various research roles and was briefly a technical advisor for Basic Attention Token (BAT).
• Amir Bandeali: Bandeali graduated from the University of Illinois with a degree in Finance and held several trading positions before launching 0x.

The 0x project launched after a successful ICO in 2017, raising $24 million with support from prominent investors like Polychain Capital, Pantera Capital, and FBG Capital.

Since its founding, the 0x team has grown to include over 30 engineers, researchers, and designers who work to continue developing and improving the protocol.

What Makes 0x Protocol (ZRX) Unique?

0x Protocol (ZRX) is unique for a number of reasons:

1. Support for Fungible and Non-Fungible Tokens: Unlike many Ethereum-based DEX protocols that only support ERC20 tokens, 0x also supports ERC-721 (NFTs) and other token types. This broadens the range of assets that can be traded on the protocol, enabling users to trade digital goods, NFTs, and a wide variety of Ethereum-based tokens.
2. Flexibility for Developers: The protocol is highly customizable, making it suitable for various use cases beyond just decentralized exchanges. For example, developers can use 0x to power:
   • eBay-style marketplaces for digital goods and services
   • OTC trading desks
   • DeFi protocols that require exchange functionality
   • In-game purchases or portfolio management platforms
3. Low Fees and Incentivization: On the 0x network, liquidity takers pay fees in the form of ZRX tokens, which incentivize liquidity providers (relayers) to maintain markets. Users also pay a protocol fee in ETH, which is used to cover the transaction costs (gas fees) required to execute trades on the Ethereum blockchain. However, 0x itself does not profit directly from these fees; instead, it is supported by ZRX tokens that are unlocked for development and incentivizing long-term contributors.
4. Decentralization: By design, 0x allows decentralized, peer-to-peer trading without relying on centralized intermediaries. This helps prevent issues related to security, censorship, and control typically associated with traditional exchanges.

ZRX Token: Governance and Utility

The ZRX token is integral to the 0x protocol, primarily serving as a governance token. ZRX holders can participate in the protocol’s governance by voting on upgrades, changes to the protocol, and how to manage the community treasury.

ZRX is also used as a fee mechanism to incentivize liquidity providers (relayers) in the ecosystem. These market makers, who supply liquidity for decentralized exchanges, are compensated in ZRX tokens, ensuring that trading pairs remain liquid and accessible.

The total supply of ZRX is capped at 1 billion tokens, with around 75% of the tokens in circulation as of late 2020. ZRX tokens were initially distributed through an ICO in 2017, with the following allocations:

• 50% sold to investors during the ICO
• 15% reserved for the 0x core development team and external projects
• 10% allocated to the founding team, with a four-year vesting schedule
• 10% for early backers and advisors

How Is the 0x Protocol (ZRX) Network Secured?

0x Protocol (ZRX) operates on top of the Ethereum blockchain, which is secured by Ethereum’s network of miners and validators. This ensures that 0x benefits from the strong security and decentralized properties of the Ethereum network.

The underlying smart contracts that run the 0x protocol have been extensively audited by third-party firms, including ConsenSys Diligence, to identify vulnerabilities and security flaws. Although earlier versions of the protocol (like v2.0) did have vulnerabilities, these have been patched by the 0x team, and the protocol continues to be actively updated and improved.

Additionally, 0x operates a bug bounty program, encouraging independent security researchers to report any potential issues to help prevent exploitation.

How Many 0x Protocol (ZRX) Coins Are There in Circulation?

As mentioned earlier, ZRX has a maximum supply of 1 billion tokens, and approximately 75% of this supply is already in circulation. The remaining supply is held for staking rewards and incentivizing long-term development.

0x Protocol (ZRX) has not publicly disclosed its emission rate or how quickly new tokens will be released into circulation, making it difficult to predict how long it will take for the supply to fully dilute. However, given that 50% of the supply was released during the ICO and 75% of the supply was in circulation by October 2020, it is likely that the token will reach full dilution sometime in the early 2020s.

0x Protocol (ZRX) provides a flexible, decentralized solution for token trading, enabling a wide range of applications for decentralized exchanges and beyond. Its combination of governance, cross-chain functionality, and developer-friendly tools has made it a key player in the Ethereum-based ecosystem.

Whether you’re a developer looking to integrate decentralized exchange functionality into your app or a user looking for a decentralized way to trade digital assets, 0x offers a powerful, secure, and open protocol for a variety of use cases.