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0x (decentralized exchange infrastructure)

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0x
Denominations
CodeZRX
Development
Original author(s)Will Warren
Amir Bandeali
White paper0x: An open protocol for decentralized exchange on the Ethereum blockchain
February 21, 2017
Initial releasev1.0 / 14 July 2017; 7 years ago (2017-07-14)
Latest releasev4.0 / 23 January 2021; 3 years ago (2021-01-23)
Code repositorygithub.com/0xProject
Development statusActive
Written inSolidity, TypeScript, Go
Developer(s)0x Labs
LicenseOpen-source license
Ledger
Supply limit1,000,000,000 ZRX
Website
Website0x.org

0x is an open-source, decentralized exchange infrastructure that enables the exchange of tokenized assets on multiple blockchains. Developers can use 0x to incorporate exchange functionality into their applications, and market makers can use 0x to create markets for cryptocurrencies and tokens. ZRX, an Ethereum ERC-20 token, is the native governance and staking token of 0x. Individuals who own ZRX can vote on protocol changes and stake their tokens to earn liquidity rewards in Ether (ETH).[1] The project's creator and core developer is 0x Labs.[2]

History

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Will Warren and Amir Bandeali began the development of the project in 2016, and on February 22, 2017, they released a white paper with the following abstract:[3]

We describe a protocol that facilitates low friction peer-to-peer exchange of ERC20 tokens on the Ethereum blockchain. The protocol is intended to serve as an open standard and common building block, driving interoperability among decentralized applications (dApps) that incorporate exchange functionality. Trades are executed by a system of Ethereum smart contracts that are publicly accessible, free to use and that any dApp can hook into. DApps built on top of the protocol can access public liquidity pools or create their own liquidity pool and charge transaction fees on the resulting volume. The protocol is unopinionated: it does not impose costs on its users or arbitrarily extract value from one group of users to benefit another. Decentralized governance is used to continuously and securely integrate updates into the base protocol without disrupting dApps or end users.

The project conducted an initial coin offering (ICO) on August 15, 2017 where it sold half of the total supply (500M) of its ZRX token in just over 24 hours, raising a total of $24M.[4]

In April 2018, David Sacks, former COO of PayPal, joined 0x's advisory board.[5]

On October 11, 2018, ZRX was the first Ethereum ERC-20 token to begin trading on the US-based cryptocurrency exchange Coinbase.[6]

On June 22, 2020, 0x announced the formation of 0x Labs stating, "As we continue to decentralize control of 0x protocol, the platform will take on an identity of its own and our organization will transition into one of the many productive stakeholders moving the ecosystem forward."[7]

On February 17, 2021, Bitwise, creator and manager of the world's largest crypto index fund, included the ZRX token among its portfolio of cryptoassets for their DeFi Crypto Index Fund.[8]

Criticism

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In August 2017, two days prior to the ICO token sale, researchers from Cornell Tech’s Initiative for Cryptocurrencies and Contracts (IC3) alleged in a blog post that the 0x protocol had fundamental flaws in its design, questioned the rationale of using the ZRX token to pay for Relayer fees when the already existing ETH token could be used instead, and criticized the lack of clarity in how the 0x token’s governance process would work.[9] Additionally, they criticized EtherDelta, a decentralized exchange that does not use the 0x protocol to facilitate its token exchanges.[9]

In response to the allegations, Will Warren maintained that the protocol had already been successfully used by 6,000 individuals who purchased ZRX tokens through the token sale that had started. He further explained that the protocol was built as a highly modular, upgradable system that would be improved upon over time, that the governance function would be plugged in once the team was certain the implementation provided the right incentives, and that the code was secure.[9]

References

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  1. ^ "0x Protocol". Investopedia. Retrieved 2021-09-21.
  2. ^ "Andreessen Horowitz Lands Latham Partner for Crypto-Focused Job". news.bloomberglaw.com. Retrieved 2021-09-21.
  3. ^ Warren, Will; Bandeali, Amir (2017-02-21). "0x: An open protocol for decentralized exchange on the Ethereum blockchain" (PDF). 0x. Retrieved 2022-03-06.
  4. ^ "0x lets any app be the Craigslist of cryptocurrency". TechCrunch. Retrieved 2021-10-08.
  5. ^ "Security Tokens Get a Boost as PayPal Vet Joins 0x Board". Fortune. Retrieved 2021-09-29.
  6. ^ "Coinbase now lets you buy and sell ZRX". TechCrunch. Retrieved 2021-09-21.
  7. ^ "Introducing 0x Labs and Periscope Trading". 0x Blog. 2020-06-22. Retrieved 2021-09-29.
  8. ^ "Bitwise Launches World's First Decentralized Finance ("DeFi") Crypto Index Fund". Bloomberg.com. 2021-02-17. Retrieved 2021-10-08.
  9. ^ a b c Castor, Amy. "Researchers Find Issues With 0x, An Ethereum-Based Project Aiming To Raise Millions In An ICO". Forbes. Retrieved 2021-09-21.
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