Creating a tokenized world where all value can flow freely.
The 0x protocol is important infrastructure for the emerging crypto economy and enables markets to be created that couldn't have existed before. As more assets become tokenized, public blockchains provide the opportunity to establish a new financial stack that is more efficient, transparent, and equitable than any system in the past.
The 0x protocol acts as the key infrastructure layer for the burgeoning number of financial applications and instruments being created using blockchain technology and trading in digital forms. With every passing day, tokens are becoming an increasing part of the world’s financial value. Consequently, the requirement to trade digital assets and tokens securely and efficiently is growing. With its clearly defined message formats and smart contracts, the 0x protocol answers this need.
0x represents one of the greatest advances in the direction of creating fully decentralized exchange applications with security and speed.
It’s an open-source, decentralized exchange infrastructure that enables the exchange of tokenized assets on multiple blockchains. It facilitates low friction P2P exchange of ERC-20, ERC-721, and ERC-1155 tokens on the Ethereum blockchain and is intended to serve as an open standard and common building block. Essentially, the 0x protocol is a standard messaging format that transacting entities can use to exchange digital assets or tokens.
Furthermore, 0x drives interoperability among dApps that incorporate exchange functionality and allows for trades to be executed by a system of smart contracts that are publicly accessible and free to use. DApps built on top of the 0x protocol can access public liquidity pools or create their own.
Learn about the 0x Mission and Values.
The 0x Ecosystem
Below is an overview of the 0x ecosystem, which includes applications who provide liquidity (Maker/Supply), applications who consume liquidity (Taker/Demand), and the multiple supported blockchains:
How it Works
Within the 0x ecosystem, there are two sides — Makers (Supply) and Takers (Demand).
Makers (Supply): This is the entity who creates 0x orders and provides liquidity into the system for the Demand side (Takers) to consume.
Takers (Demand): This is the entity who wants the Maker's asset. The Takers agree to trade their asset for the Maker's asset; in other words, they consume the 0x liquidity.
A Maker creates a 0x order.
The order is hashed and the Maker signs the order.
The order is shared with counter-parties.
0x API aggregates liquidity across all the sources to surface the best price for the order to the Taker.
The Taker fills the 0x order by submitting the order and the amount.
The 0x protocol’s settlement logic verifies the Maker’s digital signature and that all the conditions of the trade are satisfied.
The 0x Order Message Format At the core of 0x is a standard order message format. The order message format describes one party's commitment to trade assets at very specific terms with another party. By defining a standard message format for orders, 0x allows anyone who adheres to the standard to use 0x for settlement and build their application using the many open-source tools designed to work with 0x orders.
Tools
Below is a monorepo (mono repository) including 0x protocol smart contracts and numerous developer tools:
Tokens and Governance
ZRX is 0x’s native governance and staking token. It’s used to pay trading fees to Relayers for their services and stimulate market maker liquidity. However, the main purpose for ZRX is decentralized governance over 0x protocol’s upgrade system, meaning owning ZRX gives you a say proportional to your holdings in how the protocol should be improved over time.
If an organization wants to influence the direction of the protocol, they can obtain a stake by acquiring tokens. Essentially, more tokens = more influence.
Governance
ZRX token holders are able to vote on 0x Improvement Proposals (ZEIPs) which are public proposals to change the behavior of the 0x pipeline of smart contracts, including their parameters. This could also extend to off-chain tooling proposals if it relates to how the contracts are interacted with. Each token equals one vote, so the amount of tokens an individual holds determines how much voting power they have.
Since launching in 2017, the the 0x Protocol has progressively decentralized control from the founding team — its initial stewards — to an ecosystem of incentive-aligned contributors and participants — its community. Every token holder, big or small, can play a role in governance — from weighing in on ZeroEx Improvement Proposals (ZEIPs), to sharing ideas on how to use DAO treasury funds, to actively contributing to the protocol's advancement in a myriad of other ways.
Governance Participants
The 0x DAO is a community of informed people with skin in the game: ZRX owners, market makers, delegates, and other interested parties whose incentives are aligned with the good functioning of the protocol, including an ever-growing network of ecosystem partners using 0x technology in their products and services.
By participating in 0x governance, you can suggest ways to put communal funds to work, explore opportunities for the protocol to drive value creation and capture, and vote on key protocol upgrades and parameters.
Over time, participating in the act of governance enables stewards to build reputations worthy of delegation and trust; helps to surface and galvanize ideas that would otherwise remain hidden or abstract and unable to be acted on; and also strengthens community bonds that reinforce longevity and resilience.
Types of Votes:
The 0x Protocol represents one of the greatest advances in the direction of creating fully decentralized exchange applications with security and speed. This open-source, decentralized exchange infrastructure enables token exchange on multiple blockchains and facilitates low friction peer-to-peer exchange. Its intention is to create an open standard and common building block for all to use.
The 0x Protocol’s key objective is to create a tokenized world where all value can flow freely. A true democratization of tokenization.
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