What is 0x (ZRX)?

Published in

The Poloniex blog

4 min readSep 6, 2022

TL;DR

0x is a protocol that provides the infrastructure for users to trade Ethereum-based assets such as ERC-20 tokens as well as NFTs.

What is 0x (ZRX)?

0x, a protocol that facilitates the trading of Ethereum-based assets. In the case of a decentralized exchange, assets are traded Peer-to-Peer, meaning there is no central entity handling the transaction and thus users don’t have to worry about events such as hacks that might befall a centralized counterpart. What’s more, there is no central entity to collect fees.

What’s more, 0x has an API that allows developers to easily integrate with the ecosystem, lowering the friction of running a DEX and accessing liquidity. 0x’s API aggregates liquidity from on- and off-chain networks helping to solve an oft-encountered problem of low liquidity experienced by decentralized exchanges.

All of this is a part of 0x’s pursuit of facilitating adoption by reducing the friction associated with launching one’s own exchange or integrating important exchange functionalities within their product.

Advantages of 0x

0x has a lot of big names in its ecosystem, from Curve and Polygon to Coinbase and Crypto.com. So what exactly makes it so popular?

Functionality

0x is able to support all Ethereum standards, meaning users can trade tokens as well as NFTs operating on the ERC-721 and ERC-1155 protocols. Its support of Ethereum-based tokens is also constantly growing.

As mentioned before, the 0x protocol aggregates liquidity, which means that once a project plugs into the 0x ecosystem, it will have open access to a shared pool of digital assets. And just as useful as its network of liquidity is its provision of exchange functionality for projects that wish to provide that as a part of their product.

0x also has an NFT Swap SDK, which means that projects can easily achieve NFT swapping functionality.

Efficiency

The project boasts gas efficiency due to its off-chain order relay and on-chain settlement. This means that 0x doesn’t store orders on a blockchain, so validation of said transactions isn’t run through a system of mining or staking. Only order settlement occurs on-chain. So transactions are still very secure, but require a lot less gas to perform.

Security

0x’s smart contracts go through two rounds of audits to contribute to the ecosystem’s overall security. This reduces vulnerabilities within exchanges that may launch their services using 0x’s technology, and smoothes the process of maintaining said exchanges.

How does 0x work?

0x is essentially a set of audited smart contracts that enable Ethereum-based assets to be traded peer-to-peer.

And part of what makes 0x so successful on a functional level is the fact that it has a strong ecosystem of liquidity providers and liquidity consumers that are connected via 0x infrastructure.

Here, we can split the ecosystem into its two main parts, the makers (liquidity providers) and takers (liquidity consumers).

Essentially, 0x aggregates liquidity from entities such as DEX’s and AMM’s which are the “Makers”. An example here being Uniswap or Sushiswap. The Makers agree to provide liquidity to the ecosystem for takers such as Metamask or Polygon to consume. And via 0x protocol’s audited smart contracts, these trades are facilitated easily and securely.

Who might use 0x?

Besides the already mentioned Uniswap, Coinbase there are multiple verticals within crypto that can benefit from the easy integratable technology that 0x has to offer. For instance, a game project that, like many do, has NFT collectibles in the form of in-game items or skins would need an in-app marketplace where gamers can trade these assets. And with 0x’s infrastructure, the app can do just that.

Another example is 0x’s provision of a reliable, liquid ecosystem for instruments like stablecoins. In the case of stablecoins, such reliable liquidity is vital to their success and stability.

What is $ZRX and what can you do with it?

ZRX is 0x’s native governance token and is based on the ERC-20 token standard. It is used to pay transaction fees on the 0x platform. As it is a governance token, holders can use it to vote on changes within the protocol.

How to acquire $ZRX

ZRX is available on multiple exchanges like Poloniex! You can acquire ZRX through trading a USDT, ETH, or BTC trading pair: ZRX/USDT | ZRX/ETH | ZRX/BTC