Published on Feb 21, 2020
Put simply, 0x is a decentralized exchange that allows users to trade different types of Ethereum-based tokens directly. Decentralized exchanges are getting a lot of attention these days, mainly because they avoid a single point of failure.
In contrast, centralized exchanges, like Coinbase, Kraken, and ShapeShift, carry the risk of theft because they require users to put their money in the hands of a third party.
Two of the most notable virtually currency heists occurred at Mt Gox in 2014 and Bitfinex in 2016, resulting in losses of $460 million and $72 million, respectively. ShapeShift was also the victim of a string of thefts in 2016, resulting in $230,000 in losses.
So, the whole idea of a decentralized exchange is to ensure trades happen on the blockchain, where funds are more secure.
To explain further, 0x works something like this: A “maker” broadcasts his or her order. A "relayer" then posts that order in an off-chain order book and a counterparty (called a “taker”) accepts the order by pushing the transaction into the project’s DEX smart contract.
In 0x protocol, orders are transported off-chain, massively reducing gas costs and eliminating blockchain bloat. Relayers help broadcast orders and collect a fee each time they facilitate a trade. Anyone can build a relayer.
0x protocol is a pluggable building block for dApps that require exchange functionality. Join the many developers that are already using 0x in their web applications and smart contracts.
Decentralized organizations use tokens to represent ownership and guide their governance logic. 0x allows decentralized organizations to seamlessly and safely trade ownership for startup capital.
Decentralized prediction market platforms generate sets of tokens that represent a financial stake in the outcomes of real-world events. 0x allows these tokens to be instantly tradable.
Novel economic constructs such as stable coins require efficient, liquid markets to succeed. 0x will facilitate the underlying economic mechanisms that allow these tokens to remain stable.
Efficient lending requires liquid markets where investors can buy and re-sell loans. 0x enables an ecosystem of lenders to self-organize and efficiently determine market prices for all outstanding loans.
Decentralized fund management limits fund managers to investing in pre-agreed upon asset classes. Embedding 0x into fund management smart contracts enables them to enforce these security constraints.
