ZRX or 0x may be listed on Coinbase shortly, this news caused a 10 Per cent spike in the valuation of the Token. Nouvive launched an investigation into what is ZRX, Should you Buy it – YES and what will come next with it.]
0x offers a decentralised exchange or DEX for ERC20 Tokens, Tokens that are built on the Ethereum blockchain. 0x is a system of smart contracts that can be used by anyone as its open-source and free to use. Developers can use the 0x protocol as infrastructure to build user-facing decentralized exchange applications
0x is one of the best DEXs as a result of its technical approach, by use of off-chain matching of orders and on-chain execution of trades. This allows for a large number of individual trades to take place quickly without bloating the blockchain with unfilled/cancelled orders.
Why is 0x unique?
- Users who wish to conduct a trade can create a message about the specific parameters of the trade. Such as:
o Which tokens
o Order expiry
o These messages are signed and broadcasted to the rest of the network that will then be filled.
- 0x is open source for order discovery and execution
- There is a real exchange with order books and liquidity
- 0x incentives third parties to create channels called Relayers to generate and broadcast these messages. The relayers can charge a fee, payable in ZRX.
- Any third party can run their own DEX on top of ZRX, they can have their own order books and user interfaces: EthFinex and Paradex are some examples of third party exchanges.
- The barrier to entry for creating your own exchange is high, especially with settlement infrastructure and KYC/AML for asset custody.
o 0x offers this using their open source, allowing all to take advantage.
- Third party exchanges can also share order books, creating a global liquidity pool that benefits all stakeholders in the 0x ecosystem.
How it works
The 0x Protocol has the following components:
- Makers are those who initiate orders.
- Takers are counterparties who fill orders.
- Relayers are parties who host order books and match makers and takers.
- The 0x Smart Contracts are the Ethereum accounts that execute orders trustlessly on the blockchain.
- Relayers offer a front-end interface that allows users to interact with the 0x protocol. They can specify required fees for their services.
Users generate an order (signed with their private key) with a specific set of parameters and send it to a relayer. Parameters include:
- All fees in the 0x system must be paid in ZRX.
- Relayers can offer any fee structure they’d like; relayers are likely to be price competitive.
Relayers add the order to their order book, as long as it’s valid and includes the relayer’s (optional) fees.
Takers scan the order book and find orders that they’d like to fill. Once they’ve found an order, they can execute the order by sending it to the 0x smart contract.
- Which token pair and amount they’d like to trade.
- The price at which they’re willing to trade.
- A fee to be paid to the relayer.
- A time at which the order will expire.
The Ethereum smart contract executes orders on-chain. Makers and takers receive their new tokens, and relayers receive their fees.
- Alternatively, some relayers will provide “automatic matching” services so that takers are automatically matched with counterparties without having to scan the order book.
- 0x users trade directly from their own wallets. The smart contract takes balances from both the maker and the taker and swaps them at exactly the same time.
HOW DOES THE TOKEN WORK?
0x’s native token, ZRX, has two primary functions:
- ZRX is used to pay fees to relayers.
- ZRX will be used to establish some form of decentralized governance of the 0x protocol by token holders.
How Nouvive Members can make money off ZRX
- 0x stakeholders need ZRX in order to use relayers or third party exchanges. As these new exchanges gain hype and influencer, there will be a larger push to acquire ZRX.
- ZRX tokens also act as a speculation tool for relayers or third party exchanges and their ideal/fundamental tokens.
o Especially as decentralised exchanges are one of the biggest opportunities in Cryptocurrency.
- Large token holders (relayers, investment funds, DApp developers, and speculators) will seek to protect their investments, and they’ll have a process through which they can influence the direction of the project.
Nouvive recommends BUYING ZRX before its Coinbase addition and the 14 million investors that come with such a listing.
ZRX is here to stay and will revolutionise the way that Cryptocurrency listings and exchanges work.
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