The advent of Bitcoin has paved way for other blockchain protocols like Ethereum and Ripple, both of which are swiftly transforming the way we perceive finance. On Ethereum alone, more than 1,000 decentralised applications have been built so far, all of which have their own native cryptocurrency built with the help of ERC20 smart contracts. Since there are hundreds of these Ethereum tokens, there is bound to be a need to seamlessly exchange them for a low cost. 0x protocol addresses this very need through its platform.
What is 0x?
Simply put, 0x is an open protocol designed for decentralised exchange on the Ethereum Blockchain. The protocol has been developed using smart contracts and enables any developer in the world to operate a decentralised exchange so that people can trade ERC20 tokens effortlessly and trustlessly.
The main reason why 0x is a promising project is owing to its decentralised nature. If you have ever purchased a virtual currency, then it is more than likely that you have used a centralised exchange. While they are easy to use and are exceptionally fast, the downside is that these centralised exchanges can get shut down, hacked, or worse - they may run away with customers’ money.
This led to the development of decentralised exchanges where people could easily exchange ERC20 tokens on the Ethereum Blockchain, without having to deposit funds with a centralised party. However, these decentralised exchanges have their own drawbacks - they are expensive, slow, and illiquid. Furthermore, all order books are maintained on the blockchain, which means that every new order or a correction to the same has to go through the blockchain. As a result, not only is a fee incurred for every single transaction, but they are also time-consuming owing to the inherent nature of blockchain.
0x platform overcomes these inefficiencies by creating a protocol using smart contracts in which the orders are transferred off the blockchain and are brought back on only when they need to be settled. People who aid in broadcasting the order information off the chain are known as Relayers and they collect a fee every time they facilitate an exchange of Ethereum tokens.
Therefore, 0x aims to create a protocol on the Ethereum Blockchain using which, people can trade any Ethereum token and can operate a decentralised exchange.
The native cryptocurrency of 0x network is known as ZRX, and is primarily used to pay fees to Relayers for facilitating a trade. However, these ZRX tokens serve another purpose - decentralised governance of the 0x protocol. Depending on the amount of ZRX tokens owned, the owner gets a proportional say over the governance of the protocol and how the system should be improved over time. Therefore, more tokens mean more influence. The total supply of ZRX tokens is capped at 1 billion of which, a little over half billion are in circulation.
The team behind 0x has also developed a product known as 0x OTC that uses the same protocol. 0x OTC enables the peer-to-peer exchange of ERC20 tokens without the need for a Relayer, as long as you have the address of the counterparty. Therefore, anyone can generate and send their trade order to their counterparty by using a link.
Where to buy ZRX tokens?
ZRX token is considered to be an altcoin and therefore, it is to be traded with either Bitcoin or Ether on any of the leading cryptocurrency exchanges. Some of these exchanges are Binance, Huobi, Bittrex, Upbit, Poloniex, Liqui, et cetera.
ZRX Cryptocurrency Wallets
0x protocol has been developed on the Ethereum Blockchain. Therefore, its native currency, ZRX tokens, should be compatible with any wallet that supports Ethereum. Some of the most popular Ethereum wallets are Exodus, Jaxx, MyEtherWallet, Mist, et cetera. However, you should always store your virtual currencies in hardware wallets such as Nano Ledger S or Trezor.
ZRX Cryptocurrency Mining
It is not possible to mine ZRX tokens directly. You can mine other mineable cryptocurrencies like Bitcoin or Ethereum and then trade the same for ZRX on any of the cryptocurrency exchanges.
ZRX Price Trends
At the time of writing this article, 1 ZRX token is worth approximately 1 USD. The token exhibited a price trend similar to other popular coins like Bitcoin and Ripple - a dramatic surge in value followed by a sharp nosedive. The price of 0x ZRX token started rising in December 2017 from levels around $0.3. By mid-January 2018, the price had crossed $2 mark, thus making a gain of more than 500% in a little over a month.
Following the crackdown on cryptocurrencies by several authorities across the world in February, the price of ZRX plummeted and went below the $2 mark. The coin shed all its recently made gains in a matter of days.
Risks associated with investing in ZRX
ZRX, just like every other cryptocurrency, is a relatively new asset that is subject to high volatility and regulatory hurdles. Furthermore, the true value of ZRX lies on the 0x platform and ideally, it should be held by those who are interested in using the protocol and its governance.
Therefore, instead of risking your money in this volatile instrument, it is better to invest in other securities likemutual funds.
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