0x 101: Intro to 0x Protocol

0x Protocol provides an open global standard for the decentralized settlement of digital assets that unlocks access to the tokenized economy. It is a publicly owned open-source project - permissionless to use, to build on, and to govern.

Published on
April 27, 2023
Learn & Build
0x 101: Intro to 0x Protocol

Over the past few years, there has been a growing wave of innovation and adoption in Web3. With it has come a multitude of new blockchains, thousands of new tokens, and a blossoming NFT market for collectibles and digital art.

Blockchains give us an opportunity to leave the geographic lottery behind by establishing an open and globally accessible system that acts as a potent equalizing force for the world. For this to become a reality, however, Web3 needs a common standard that can enable tokenized value to flow freely, regardless of what blockchain, wallet, or app people use. Protocols that are open and permissionless, like the protocols that laid the foundation for the flourishing of the internet, will be essential to unlocking the full potential of the decentralized future.

0x Protocol provides an open global standard for the decentralized settlement of digital assets that unlocks access to the tokenized economy - facilitating the exchange of cryptocurrencies, NFTs, DeFi tokens, and more. It is a publicly owned open-source project - permissionless to use, to build on, and to govern.

Value is becoming native to the internet

Since 2016, the core thesis for 0x has been that all forms of value will be tokenized on public blockchains. Over the next decade, everything that can be tokenized will be - from stocks and bonds to collectibles and video game items.

As more assets are tokenized and moved onto blockchain rails, public blockchains have a greater chance of democratizing access to financial services in the same way that the internet has democratized access to information.

This is already playing out in earnest - governance tokens, collectibles, generative art, 1/1 art, photography, and much more.

Why the boom of tokenized value?

  • Permissionless: Anyone can spin up a token and a globally accessible market in minutes
  • Global Distribution: New tokens and markets are instantly accessible through popular wallets and interfaces
  • Bootstrapped Liquidity: Liquidity pools allow token holders to passively provide liquidity, eliminating reliance on professional market makers

As on-chain activity grows, however, the ecosystem becomes increasingly more fragmented. Developers and traders must navigate between blockchains, wallets, and apps. Tokens, markets, and users are scattered across a diverse set of blockchain ecosystems. And token liquidity is fragmented across dozens of DEX protocols with distinct delivery mechanisms and incentives.

Enter 0x Protocol

0x Protocol is the trusted open source protocol for the settlement of decentralized exchange of tokenized value. What does all of that mean?

Trusted open source protocol

0x Protocol smart contracts have been battle tested on mainnet and audited a multitude of times. The protocol is permissionless to use and to build on; all code for 0x Protocol that is deployed on-chain can be found and contributed to here. And governance over the technical development of the protocol is also permissionless and coordinated via the $ZRX token.

Settlement of decentralized exchange of tokenized value 

0x Protocol is developed under the core thesis of off-chain infrastructure with on-chain settlement for the highest gas efficiency. 0x Protocol provides reliable, non-custodial execution of orders that off-chain services like 0x create, meaning that the user assets are never held by off-chain intermediaries.

0x Protocol achieves this via a system of smart contracts. This system can be thought of as a series of pipes that takes users’ tokenized assets as inputs and returns the tokenized assets that users want instead as outputs. This series of pipes is structured to provide an extensible, modular architecture that allows new functionality to be added or existing features to be upgraded without interruption. Some of the features that are deployed today include LimitOrders, MetaTransactions, MultiplexFeature, and ERC721Orders (NFT swaps), among many others that allow 0x Protocol to handle the endless forms that tokenized assets can take.

0x Protocol serves as the foundational settlement layer of the 0x infrastructure tech stack and a core Web3 building block, but it is just one piece of the larger 0x Ecosystem facilitating the exchange of tokenized value. This vibrant ecosystem consists of off-chain exchanges, aggregators (including Swap API), and NFT marketplaces that have all been built on 0x Protocol.

To learn more, visit 0xprotocol.org.