Coin Whisperer's Coin of the Week: 0x (ZRX)
Long term sentiment: Bullish Long term price target: 0.00015000 BTC Short term trade potential:
Buy around: 0.00003500 BTC Target 1: 0.00004000 BTC (14,29%) Target 2: 0.00004650 BTC (32,86%) Target 3: 0.00005300 BTC (51,43%) Target 4: 0.00006000 BTC (71,43%) Target 5: 0.00006850 BTC (95,71%)
Stop-loss: 0.00003120 BTC (-10,86%)
Mid-long term signal (10–21 days)
0x is an open-source protocol built on the ethereum blockchain which enables the peer-to-peer exchange of ethereum-based tokens. It is essentially a DEX or Decentralized Exchange.
The 0x platform gives users the ability to exchange a multitude of tokenized assets such as stocks, bonds, real estate, etc. The goal is to promote interoperability between Dapps including exchange components.
How does 0x work?
0x’s decentralized trading focuses on an off-chain ordering relay, this helps to cut down gas prices and reduces bloat on the network. Decentralized exchanges typically use smart contracts which run on the Ethereum blockchain. All orders on decentralized exchanges take place in these smart contracts, which means users are in control of their funds instead of trusting them to a third party like the centralized exchanges that exist today (Binance, kucoin, bittrex).
This means that traders are required to execute all of their transactions on the blockchain every time. As a result of this, there is a fee, known as gas which is paid in ethereum to make sure that every transaction is processed on the blockchain by the miners that secure the chain. That unfortunately means that every time a trader deposits funds into a DEX smart contract, places an order, cancels an order, or fills an order they will need to pay for the gas to execute the transaction.
Decentralized exchanges are a great alternative to centralized exchanges because of the security they offer by allowing users to control their own funds. However the gas fees can quickly add up between all of the transactions that need to execute on chain and this is where 0x enters the ring.
The 0x protocol improves decentralized exchanges by utilizing off-chain ordering relays in conjunction with on-chain settlements. Basically, the 0x protocol allows you to broadcast your order off-chain that another user will fill. Only value transfers are executed on-chain, leaving all other trading commands to off-chain procedures. As such, transactions only run through the network when the trade is actually executed, this allows users to reduce the gas fees that are associated with standard trading operations.
0x uses what they call relayers who are responsible for broadcasting orders through both private or public order books. These relayers help bring liquidity into the network by hosting the order books, acting similarly to an exchange. However, unlike an exchange, the relayer is unable to execute a trade and is only able to facilitate trading by presenting maker orders which are broadcasted to the network. In order for a trade to be executed, a taker must fill the order by submitting the makers signature along with its own to the DEX’s smart contract. The relayer is compensated for facilitating the exchange and recieves a fee in ZRX which is the native currency of the 0x protocol.
When trades are processed through the relayer on the 0x protocol, they called broadcast orders. The protocol allows for anyone to submit orders to the network and also allows anyone to intercept the order and fill it. This solves the issue of liquidity by allowing anyone to act as the exchange by maintaining an order book, either public or private, and charging transaction fees on all resulting liquidity.
The 0x protocol also allows for point to point orders which are individual orders that are submitted by makers with a specific taker as the target. Point to point orders allow users to transfer funds directly through almost any commnication medium they prefer. The order can only be filled by the specified taker address, which prevents hijacking by malicious outside groups or individuals.
The ZRX token is not only used as compensation for relayers who broadcast orderbooks, it is also used as the key for 0x’s decentralized governance. Stakeholders propose and elect protocol improvements that are implemented within entirely new smart contracts using the ZRX token via a DAO. The DAO authorizes new smart contract(s) to access user tokens by adding them to the Proxy contract’s whitelist and eventually unlists deprecated versions of the protocol.
Most recently a vote was held to implement 0x V3, token holders voted on V3 implementation and the vote was sucessful. V3 will go live on November 25, 2019. 0x V3 will allow token holders to stake their ZRX tokens with market maker pools which will provide liquidity to the markets running on the 0x protocol. V3 also includes a set of powerful bridge contracts that pull liquidity from 0x and other DEX networks like Kyber, Uniswap, and Oasis.
Coin of the Week Giveaway
We are huge fans of the 0x protocol and are excited for the future they are attempting to build. Because of that we are giving away 170 ZRX!
The ZRX token is available for purchase and trading on Binance, Coinbase, Bitfinex, Huobi, OKEx, HitBTC, and Liqui among others.
Join our competition and get a chance on winning 170 ZRX!