0X is a permissive free protocol used to facilitate ethereum-based token transactions, including ERC-20, ERC-721, and other Ethereum standards. 0X is not a decentralized exchange per se, but a smart contract system that connects liquidity providers and market makers to provide trading capabilities across a range of applications.

Launched in 2017 with a mission to "create a tokenized world where all value can flow freely," 0X envisions a world where all forms of value are tokenized on a public blockchain. This includes fiat currencies, stocks, commodities, bonds, debt instruments, real estate, video game projects, software licenses, digital collectibles, personal tokens, and more.

DEX often faces usage and mobility challenges.

0X addresses these issues by providing a flexible DEX architecture, comprehensive developer documentation and tools, an easy-to-integrate 0X API, and a networked encrypted liquidity pool (from local 0X sources as well as other switching networks) accessible through 0X Mesh, a fully decentralized P2P global order book, Operates independently of the Ethereum blockchain.

0X is both a messaging standard and a set of smart contracts. Market makers can send messages off-chain that include details about their orders, such as the tokens being traded, the price, and the expiry date of the order. The correct format of the message is stored in the token registry, a smart contract that stores a list of ERC20 tokens that can be exchanged. The registry serves as the official on-chain reference for trade settlement and is used by market participants to confirm that token addresses and exchange rate transactions will be settled immediately. The smart contract suite accepts signed messages from recipients and executes transactions on the chain. Smart contracts also provide the logic to upgrade agreements over time. A third-party repeater builds the actual exchange on top of the 0X and is responsible for maintaining the order book that hosts the signed messages. To provide this service, Repeaters set up a fee table similar to a centralized exchange. The main difference is that the repeater does not hold the user's assets because transactions occur on the chain. Because the repeater system was outside the Ethereum main chain, one of the main issues the team wanted to proactively address was the possibility of pre-emption. When a transaction is delivered to the Ethereum main chain, the order can be observed on the chain and then run ahead of time by adding extra gas to the transaction, which allows users to complete their transaction first.

ZRX tokens provide governance and collateral functions.

Flexible off-chain relay and on-chain settlement architecture: 0X does not store orders on the blockchain. Instead, orders are stored off-chain and only trade settlement occurs on the chain. This unique capability makes 0X a flexible and efficient DEX protocol for developers to build on. Unmanaged switching protocol: when an order is executed, the asset is settled directly between the wallets of two traders. This greatly reduces the counterparty risk involved in trading assets. Traders only need to trust the small amount of 0X protocol source code running on the blockchain. All source code with the privilege of transferring trader funds is open source, immutable and verifiable on the chain. The 30X protocol is built to be highly modular and extensible.

After raising $24 million in Ether (ETH), 0X completed a token sale on August 16, 2017. The sale was extended until August 18, 2017, but ended after the purchase limit was reached within the previous 24 hours. A total of 1 billion 0X tokens were created and distributed, as shown below: 50% were allocated to participants in the token sale; Fifteen percent is set aside for ongoing expenses; 15% allocated to the developer fund to help grow the 0X ecosystem; 10% were assigned to teams with a four-year ownership schedule; 10% is allocated to initial advisers and investors.

In V3, 0X introduces a new staking mechanism for market makers, allowing them to participate in governance and be rewarded by ETH for providing liquidity to the network. ZRX holders can also earn rewards by entrusting their tokens to a market-making pool.

0X protocol differs from other DEX protocols in its hybrid under-chain relay and on-chain settlement architecture. Unlike other decentralized exchanges that only run on the chain, 0X does not store orders on the blockchain. Instead, orders are stored off-chain and only trade settlement occurs on the chain. This unique capability makes 0X a flexible and efficient DEX protocol for developers to build on.

The 0X project has been well implemented, and the application ecology based on 0X is gradually being established. By matching off-chain transactions with on-chain transactions, 0X not only reduces transaction costs, but also greatly improves the efficiency of decentralized transactions. In the future, with the development of the 0X project, more and more users and market makers will join the 0X ecosystem, and the decentralized exchange will become practically universal. The 0X protocol provided by ZRX project is very innovative and subversive, and many applications have been using this protocol. Although it is still facing problems such as poor scalability, 0X is also developing constantly, and there will be cross-chain plans in the future. With the improvement of ecological chain layout, the prospect of the project is worth expecting.

Smart contract code bugs, transactions on 0X are limited by high ethereum gas costs and performance limitations.

The 0X protocol is an open and community-oriented product that contributes to Ethereum's rapidly growing DeFi ecosystem and pioneered a new business model that prioritised community use over short-term profit. In addition, 0X Labs seeks to expand beyond Ethereum to further solidify the 0X protocol as the core DeFi building block for the future of multiple blockchains.

0X carried out initial coin offering as early as August 2017, but based on the project economic model, the coin price did not perform well. After THE release of V3 at the end of 2019, market makers were encouraged, which will have a favorable impact on the ecosystem in the long run. With the wave of DEFI, as the basic protocol of DEX, in addition to risks such as contract loopholes and market regulation, the value of ZRX token will also show good development of the project and be able to be laid out in the long term with the expansion of the usage of incentive users.