0x Wiki ▷ What is ZRX? Cryptocurrency & more!
The 0x Coin (ZRX) has made waves in the cryptocurrency space and generated great enthusiasm among investors. We explain to you what the 0x Coin is and why it has received a lot of attention. Bitcoin News.one always recommends caution before making cryptocurrency investments, and we encourage you to do your own research.
What is the 0x coin?
First of all, you should know that 0x is also generally referred to as a ZRX coin. Often times, people use either of the two terms, but they are talking about the same cryptocurrency. The 0x team describes its project as "an open protocol that enables a reliable and smooth exchange of Ethereum-based assets". What does this mean now?
There are currently thousands of different digital assets on the Ethereum blockchain. A classic example would be an ERC20 token.
These ERC20 tokens are digital tokens based on the Ethereum blockchain and issued by cryptocurrency projects that have launched their own ICO. The 0x-Coin is an example of an ERC20 token. Essentially, ERC20 tokens are Ethereum's solution for creating an ICO quickly and easily.
With all these different digital assets that are based on Ethereum, it is difficult to communicate with one another. This is where 0x does its job: Put simply, 0x tries to make it easier to swap one Ethereum-based digital asset for another. For example, if you trade the ZRX coin against Ethereum.
0x is known as "Public Infrastructure". This means that 0x creates the method of exchanging an Ethereum-based asset for another asset. It is essential to know that 0x is not an application. Instead, the 0x methodology is used by various applications and platforms that want to have access to the asset exchange. Cryptocurrency Exchanges are an example of 0x solution based platforms.
Why you should use 0x
What exactly distinguishes the ZRX Coin from other cryptocurrencies?
In short, 0x tries to make asset swaps faster and cheaper.
Ethereum pioneered the creation of the smart contract. This digital contract enabled the exchange of digital assets between partners without the need for a third party.
Why is it important to know? Before smart contracts came about, the cryptocurrency exchanges had to be centralized. This means that exchanges had to be operated by third parties who oversee transactions. Practically every known cryptocurrency exchange such as Coinbase, Kraken or Binance is currently a centralized exchange. The problem with this type of exchange is that user funds are centrally stored and can be hacked.
However, the cryptocurrency exchanges continue to develop and in recent years the decentralized exchanges have increased. On these exchanges, individuals actually exchange digital assets peer-to-peer and there are no middlemen involved in the transaction. That means fewer fees and better security guarantees.
Many in the cryptocurrency industry see decentralized exchanges as the revolution in cryptocurrency exchanges. 0x and the concept of swapping digital assets for other assets makes this the ideal solution.
How does the ZRX Coin work?
The problem for decentralized exchanges is currently that the process of trading is still very inefficient, which leads to high costs for the “market maker”. This makes decentralized exchanges less attractive for market makers and leads to a low volume on these exchanges.
Why are the costs on decentralized exchanges currently high? Basically every time a trade is made, a smart contract is created to execute the command. Every smart contract that is created requires a fee that must be paid in Ethereum to ensure the command is executed.
This means that at a decentralized exchange, you pay a fee for depositing into the exchange, a fee for exchanging a cryptocurrency and a fee for withdrawing. These fees add up and considerably reduce the attractiveness of active trading on decentralized exchanges. However, this also means that decentralized exchanges offer more security guarantees than central exchanges.
The ZRX Coin aims to solve these decentralized exchange problems through the use of off-chain relays. Basically, the ZRX Coin has found a way to move a significant number of transactions off the network and ultimately all in a single on -Chain transaction to be processed. This means that only a single fee is paid for smart contracts. Basically, fees now only have to be paid if two different cryptocurrencies are actually traded, so that fees for creating or changing orders do not apply.
Important concept: liquidity & order books
Cryptocurrency exchanges are all about having what is called a liquid market. Liquidity means that there is a lot of activity in a market. The result is that an asset can be bought or sold quickly without affecting the price.
The easiest way to explain order books and liquidity is to look at the betting market on the Betfair exchange. In a football game against the two unknown teams Mbabane Swallows and Etoile du Sahel it is about betting on a draw.
The order book is the amount of money people are willing to wager on a specific event or bet against an event with a specific price. Here we see that the people on Betfair are willing to risk £ 19 if they bet 25 to 1 against a tie. So a speculator can only get £ 19 at that price on Betfair. However, an additional 22 pounds are available at worse odds of 24 to 1 and 65 pounds to 22 to 1.
Liquidity is important because if we wanted to bet £ 5.000 on the draw for this soccer game at the current rate of 25 to 1, we will be prevented from doing so. Instead, in this situation we can only bet £ 19 at the current odds and for the remainder of our bet we would get constantly falling odds. Betfair's very thin order book makes the market highly iliquid.
Something similar happens with cryptocurrencies. So that you can be offered a fixed price for a coin, there is an order book behind it.
How is the 0X Coin able to solve the liquidity problem?
Now you know why there isn't much trading activity in an iliquid market. The liquidity problem is therefore a major problem for decentralized exchanges.
Der0x Coin has solved this problem by allowing anyone to keep a public or private order book and to charge a fee for liquidity. The companies or individuals who own these order books are called relays. These relayers increase the liquidity of the 0x platform and facilitate trading between makers and users.
An example of an order book maker: A person who has 10.000 0x coins and is ready to sell for $ 1,10. A taker would be a person who wants to spend $ 11.000 on 0x-Coins and is happy with a price of $ 1,10. The Relayer can be seen as adding value and earns a fee to enable this trade and thus earns additional ZRX Coins.
The important thing is that the relayers don't actually process the transaction. Instead, everything is done through a smart contract and the relayer does not take possession of any funds. This means that the transaction can be carried out in a trustworthy manner and without third parties.
With a view to reducing smart contract fees, everything (except the final trade between the buyer and the manufacturer) is done outside the network and does not use a smart contract. This means that fees are only charged for the actual transaction and not for placing the order.
Point-to-point orders are essentially peer-to-peer transactions. In this case a manufacturer wants to trade with a specific participant. In principle, the manufacturer can send an order relay in peer-to-peer mode and only the designated participant can let the trade run through.
Why is this function important? Large digital asset trades usually do not take place on central or decentralized exchanges. Instead, they occur in over-the-counter markets. Over-the-counter companies are where the big players hang out to trade cryptocurrencies. The over-the-counter operator could have orders worth 100 million euros to buy ZRX coins or sell them to other people. The over-the-counter company would do this over-the-counter to ensure that the price of the asset did not move.
If a 100 million euro order for a cryptocurrency was placed within an exchange, it would change the price of the asset guaranteed. Crypto is still a relatively small market and is not liquid enough for such large orders. By using an over-the-counter solution, massive buyers and sellers of cryptocurrencies avoid these problems. This is where 0x peer-to-peer orders are particularly useful.
How is the ZRX coin used?
Basically, when someone exchanges cryptocurrencies with the 0x protocol, all fees are paid with the ZRX coin. Relayers are also rewarded in ZRX Coins for the liquidity they make available to the platform. In short, if there is a fee associated with using 0x then it will be paid through the ZRX Coin. The coin also plays a role in guiding and voting on future protocol changes.
The 0x team
The 0x project has the potential to mark the next step in the cryptocurrency exchange revolution. But every big project needs a team that is able to take the market to the next level. The 0x team is 18 people. Bitcoin-News.one is impressed by the diverse skills and experience that the 0x team has to offer. In fact, a significant number of former Apple, Facebook and Google employees are involved in the project. Unfortunately, for reasons of space, we cannot deal with every team member. However, we will give you an overview of the 0x founders.
Co-Founder & CEO - Will Warren: Unlike most tech company founders, Will graduated from the University of California SanDiego with a degree in mechanical engineering. He then did his doctorate in building construction at the same university.
Will later became a technical advisor to Basic AttentionToken and then co-founded the 0x project.
Co-Founder & CTO - Amir Bandeali: Amir began his professional career at the University of Illinois and completed his BSc in Finance. Amir followed his interest in the financial markets and accepted three trading assignments with Chopper Trading and DRW. Apparently, Amir thought that his knowledge of trading in financial markets could be better used and decided to co-found 0x.
The future of 0x
The0x project has already achieved a lot in its short lifespan. In mid-2018, Coinbase acquired the Paradex exchange - Paradex uses the 0x protocol. With this latest acquisition, it wouldn't be surprising if Coinbase were to incorporate 0x technology into their entire platform in the future.
0x has the potential to be the next step in the development of crypto trading. With cryptocurrency exchanges like Binance (which made more profits in 2018 than Deutsche Bank), it is not surprising that running a cryptocurrency is very lucrative.
However, trading hack attacks are a problem in the market. 0x offers a possibility for exchanges to offer their customers more security and at the same time to reduce decentralized exchange fees.
We have no doubt that 0x will benefit from increased adoption once cryptocurrency markets grow. In fact, it could potentially be the building block on which any future crypto trade will be built.
The 0x ICO
The 0x ICO took place in August 2017 and raised $ 24 million. The project's early funders got committed to the project for just $ 0,048 per ZRX coin.
Since then, the coin has become one of the 25 strongest cryptocurrencies. This shows that an ICO doesn't have to raise $ 40 million (like some other crypto projects) to establish itself in the market. Although 0x raised less money in its ICO than other projects, it still remains one of the best funded cryptocurrencies out there.
Should I Invest in the ZRX Coin?
Decentralized exchanges are widely viewed as the future of crypto exchanges. 0x solves the biggest flaws that the centralized exchange has. This should make 0x more competitive compared to their central partners in the future.
The need for the 0x protocol should increase as cryptocurrency prices rise: As cryptocurrency prices rise, centralized exchanges become bigger and bigger targets for hackers.
The ZRX Coin has a meaningful use case.
· The protocol currently only supports Ethereum based assets.
It is unpredictable whether exchanges like Binance will use the 0x solution or create their own solution.
How can I buy the 0x Coin?
Coinbase recently announced that they may list ZRX Coins in the near future. Once that is the case, this is the easiest way to buy 0x. At the moment our recommended method is a combination of Coinbase and Binance. Our simple one Buying guide explains you step by step how to buy 0x.
There is no doubt that trading is big business. Thus, 0x is one of the few companies in the industry that is currently generating an actual cash flow. The problem with exchanges is that most of the trading volume takes place on central exchanges. This creates an environment in which crypto investors are at risk of being hacked.
0x creates a cryptocurrency ecosystem where investors don't have to take the risk of using centralized exchanges. Thus, you can use the advantages of a central exchange, but also have the security that decentralized exchanges offer. In addition, 0x reduces trading fees
The ZRX Coin has positioned itself to play a key role in the crypto exchange industry. The Bitcoin-News.one team would be interested in supporting other non-Ethereum-based assets such as NEO looking forward. However, we are confident that the 0x team will implement this support in the future.
In summary, we like from BC1 0x as an infrastructure game, especially since it is so well positioned in the most lucrative area of the crypto economy.