Decentralized crypto exchanges here, decentralized exchanges there. And right in the middle 0x (ZRX). The Ethereum protocol uses a number of smart contracts to implement very similar applications to decentralized exchanges. However, the project started with the firm goal of even surpassing the advantages of decentralized exchanges. With ZRX, not only a series of tokens can be traded among each other, but also all kinds of tokenized asset investments such as real estate or bonds.
Here are three possible uses for 0x.
ZRX: The fast alternative for crypto trader
Decentralized crypto trader exchanges are considered slow. This is because the transaction duration for crypto trader on decentralized exchanges is fundamentally dependent on the block times. Furthermore, trading partners have to pay transaction fees for each order, as they use capacities on the blockchain.
0x claims to have found a solution to these problems. Because ZRX is a so-called second-layer protocol. This means that trading partners can carry out any number of transactions with the help of 0x without having to resort to the Ethereum blockchain for each individual transaction. Only the “clearing”, i.e. the final balance sheet, must reach the blockchain. According to the 0x developers, this saves time and money.
The tokenized economy
One of the great value propositions of blockchain technology is the creation of tokenized digital investments. A number of start-ups are already working on the implementation of new token-based asset classes.
These bring some advantages. Transactions can be carried out significantly faster than traditional financial market transactions. In addition, asset tokenization offers the ability to divide high-volume investment products, such as real estate, into any number of small tranches. Each token then represents a percentage share of the total product.
0x could become an integral part of this “tokenized economy”. Because investors can trade all possible tokens on 0x, not just those based on ETH.
The integration of more and more tokenized investment products into the financial market would undoubtedly result in an efficiency gain: Market entry barriers would be eliminated, as investments could also be realized with less capital. The markets would be more transparent and transaction costs lower.
The loan market could also be improved with 0x. Blockchain technology creates a level of transparency and commitment that is second to none.
This could increase the importance of peer-to-peer lending, in which private individuals act as lenders. With more competition on the money market, more efficiency and lower prices can be expected than at present.
0x is a promising project in the field of tokenized economy. It is a versatile, object-oriented protocol that is suitable for a variety of applications in the sense of token trading.
It remains to be seen whether ZRX will become the standard for decentralized trading in digital securities.