0x

0x is an open protocol for decentralized exchange on the Ethereum blockchain that enables peer-to-peer trading of Ethereum-based tokens without a centralized intermediary. The protocol specifies a standard for creating and filling off-chain orders that describe how a trade should occur and what is being exchanged. Traders sign orders off-chain, relay operators publish these orders, and any approved taker can fill a matching order by invoking the 0x smart contracts to settle the trade on-chain. This design allows wallets and apps to offer trading without custody of users’ funds by relying on on-chain settlement and off-chain order relaying.

Key components of the 0x ecosystem include the 0x Protocol smart contracts, the ZRX ERC-20 token, and companion services such as 0x API and 0x Mesh. Relayers host order books and earn fees in ZRX for providing liquidity and access to their order flow. The ZRX token is used to pay trading fees to relayers and acts as an incentive mechanism within the protocol’s network.

0x enables a variety of use cases, including decentralized exchanges, wallet-integrated trading, and aggregator services that pull orders from multiple venues. It is designed to be protocol-agnostic, allowing developers to build new exchange experiences on top of a shared, interoperable standard rather than recreating liquidity from scratch.

Challenges and considerations include liquidity fragmentation across multiple relayers, the impact of gas costs on on-chain settlements, and security risks inherent to smart contract-based exchanges.