E&S: ZRX, The Liquidity Endpoint For DeFi

Hey Publish0x community! Welcome back in this new article of my “Easy & Short Cryptocurrencies Made Accessible” area.

In this article we talk about more features of 0x!

In the last E&S article I introduced you 0x (ZRX) and I said that is an open-source protocol built on the Ethereum blockchain that enables the peer-to-peer exchange of Ethereum-based tokens. It is also referred to as a decentralized exchange. 0x uses general smart contracts on shared infrastructure. Its technology combines two strategies-state channel and Automatic Market Marker (AMM), that have already been suggested to overcome these problems. State channels take transactions offline, thereby reducing the costs incurred when transacting on the Ethereum network.

Today we're going to talk about 3 more things about 0x:

- ZRX Token

- How 0x works

- Decentralized Governance

So, let’s start!

ZRX Token

0x has capped the ZRX supply at 1 billion tokens. 50% of ZRX tokens were sold to the public through an initial coin offering (ICO) for a total of $24 million dollars worth of ETH.

According to the 0x white paper, a fixed supply of ZRX tokens is issued to cooperative dapps and future end users. In order for the relayers to be rewarded with ZRX tokens, they must host, maintain, and order books off-chain in exchange for transaction fees. When the transaction is settled, these fees are transferred from the maker and/or recipient of the smart contract to the relayer.

How does 0x work?

The operation of 0x is mostly off-chain, meaning transactions are made outside of the Ethereum blockchain.

The advantages are:

1) Better control over the exchange process.

2) Fewer errors.

3) It is much faster and cost-free.

Knowing this, we can deduce that:

- The Decentralized Exchange Contract (DEX) is approved to access your balance in A tokens.

- The creator generates an order to exchange token A for token B. He specifies the desired exchange rate, expiration time, and signs the order with his private key.

- The order is transmitted to the network so that it can be processed by the relayers.

- The counterparty accepts the order.

- The DEX contract is approved to access the counterparty's token B balance.

- The counterparty signs the order expressing its interest in completing the transaction.

- The order is returned to the network for processing by DEX.

- The DEX contract authenticates the producer's signature, verifies that the order has not expired, verifies that the order has not yet been completed, and then transfers the tokens between the two parties at the specified exchange rate.

0x core values

1) Do the right thing.

2) Consistently ship.

3) Focus on long-term impact.

Decentralized Governance

Once the Ethereum smart contract is deployed to the blockchain, its internal logic cannot be changed. Therefore, to update the protocol, a brand new smart contract must be deployed, which either forks network or interrupt users and processes that rely on the protocol until they "opt in" the latest version. In an exchange environment, disruptive agreement updates may cause all outstanding orders and each market participant is required to approve a new smart contract to access their trading balance. Alternatively, the protocol can be divided into two versions running in parallel to offset network effects created by dApp interoperability.

0x will be deployed to the Ethereum blockchain, where a fixed supply of protocol tokens will be issued collaborate with dApps and future end users. Protocol tokens have two purposes: for market participants payment of transaction fees to relayers and decentralized governance of protocol updates.


Protocol updates may be deployed without disrupting the network through a combination

of contract abstraction and decentralized governance. The end user provides an agency contract with access rights to the tokens they plan to trade. Stakeholders propose and elect agreement improvements implemented in a brand new smart contract (DEX v2) through DAO. DAO empowers new intelligence by adding the user token to the whitelist of the proxy contract and finally canceling the list to access the contract of the user token deprecated protocol version.

Next week I’ll introduce you a new cryptocurrency!

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If you have any cryptos you'd like to see analyzed and summarized let me know in a comment!

























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MikeZillo Verified Member

Daily Trader, Mining Farm Project Manager, Blockchain consultant, Cryptocurrency evangelist. You can find more videos here Telegram: @mikezillo

Easy&Short. Cryptocurrencies made accessible
Easy&Short. Cryptocurrencies made accessible

In this section, we are going to create two article per each cryptocurrency/token. The first one will be technical, with a simplification of the Whitepaper and the second one will be about particulars of the coin. For example staking yields, particular functions and so on! I am sure you will like this very much!

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