To say that 2020 has been a transformational year for the decentralized exchanges space would be an understatement.
While launching Matcha and onboarding more applications onto 0x API, 0x Labs has started experimenting with a novel smart contracts architecture for its public smart contracts.
This has proven to be a very effective design change, which contributed to making 0x API the best option for teams looking to source liquidity at the best price across DEXs.
The team has continued to iterate on this experimental design to the extent that it has now all the necessary features to be considered the canonical 0x v4 protocol. In order to officially launch 0x v4, a community governance vote is scheduled to register the new contracts.
On Saturday, January 16th at 8 pm UTC (12 pm Pacific Time), ZRX token holders will be able to go to 0x.org/zrx/vote and cast their vote. The vote will end the next Saturday, January 23rd.
0x v4 brings net improvements across three areas:
- It’s DeFi native. Liquidity aggregation is in 0x’s DNA. Thanks to its peer-to-peer protocol design, 0x can represent a superset of liquidity sources, which combined together produce the best price for end-users. In addition to that, this version of the protocol introduces the concept of Transformers, which are customizable modules able to execute atomic operations on the traded assets (such as token wrapping/unwrapping, or deposit/withdraw from LP positions).
- It’s the most gas-efficient DEX protocol. Every DEX user knows that Ethereum fees cannot be ignored. That’s why 0x Labs focused on optimizing the gas consumption of the smart contracts, achieving a net improvement without sacrificing its features. Compared to v3, 0x V4 improves RFQ gas costs by almost 70% (our simulations clocked 105k gas VS 320k on v3) and open orderbook gas cost by 10%. In addition to that, it is cheaper to trade on both Uniswap and Sushiswap using 0x v4, thanks to an optimized Uniswap router.
- It’s automatically upgradable. Say goodbye to yearly, monolithic protocol upgrades. The new architecture allows addition and modification of specific features without requiring existing 0x applications to ‘migrate’. This means 0x contributors (including but not limited to 0x Labs) can focus on implementing smaller, relevant features one at a time. Thanks to this new architecture and to the 0x governance process, the protocol will be able to iterate faster based on what the market needs, without having to wait for the ‘next 0x version’.
- It offers plug&play liquidity. V4 allows custom on-chain liquidity pools to be plugged in via a standard interface and easily aggregated with all other liquidity sources. Whether you’re a market maker with a proprietary on-chain strategy or a developer building the next-gen public AMM, V4 can support your use case out of the box.
If you are a ZRX token holder, save the date! On Saturday January 16th, go to 0x.org/zrx/vote and cast your vote.
If you are a DEX user, we hope you will soon be able to enjoy the benefits of these improvements when using a 0x-powered application.
We hope the community will embrace this proposal positively, as we are confident that with 0x v4 we will better equipped than ever to replicate, if not surpass, 2020 breakneck growth and onboard millions of users to the DEXes world.