Decentralized exchanges (DEXs) are a great leap forward in transparent trading without a license, and they exist as great alternatives to centralized exchanges.
While DEX simplifies the listing process for new ERC-20 tokens and eliminates the need to pay high registration fees to central governments, they still have the problem of rising gas fees. This is exactly the problem that Protocol 0x (ZRX) is trying to solve.
0x Protocol ICO (ZRX) raised $ 24 million in August 2017 for 50% of the show without prior sale. As an ERC-20 token, a license-free protocol connects liquidity providers through smart contracts, thus accumulating liquidity.
The protocol provides interoperability between different DEX and decentralized applications. Hence, ZRX should not be considered a competitor to Uniswap, as it benefits from increased liquidity in the sectors.
While the ZRX token has been quite volatile in recent weeks, there is an uptrend as it tries to establish $ 0.50 as a support level after the price increased by 22% in the past 24 hours.
From servers to service
ZRX Tokens were originally launched as a voting mechanism for management proposals, and were suspended after the v3 update in late 2019. Market makers can then receive a reward in ETH for liquidity provisioning services. Meanwhile, owners can take advantage of delegating tokens across groups.
In June 2020, the project launched the DEX liquidity pooling service known as Matcha. After three years of use exclusively as a backbone, 0x Protocol has created a smart order path service that includes DEXs like Uniswp, Curve, and Kyber.
Social Activity and DEX are probably the most important accounts to gauge the growth of DeFi tokens. Dune Analytics data shows that Uniswap and SushiSwap account for over 60% of the volume, but it is important to remember that liquidity aggregators are not direct competitors to the 0x protocol.
Thus, the overall growth in the DEX market over the past year is actually a positive driver for the ZRX token. When we look at the use of the 0x protocol, we can see that the weekly volume of 0x has more than doubled from the weekly average of $ 350 million from October to November, reaching 10% of the market share.
0x activity for large protocol implementations in the last 30 days. Source: 0xtracker.com
If we look closely at the network activity of 0x, the above graph shows that many platforms are using the liquidity pooling functions of the 0x protocol. These trades can take place on many DEXs, including Uniswap, Curve, and Balancer.
Return of market makers and update version 4
On December 15, Theo Gunnella, Product Manager at 0x Labs, submitted data from a market producer that made a 100% profit in 2020, offering 284 ETH liquidity across 41,000 deals. Recently, 0xTracker mentioned that 1782 ETH was awarded the 0x market code as a liquidity bonus in 2020.
The vote on 0x Project v4 will take place from January 16 to 23 and aims to reduce petrol price orders by 70%. According to the 0x Labs Code, this release allows custom modules to perform nuclear operations, including token filling and expansion.