Multiply by 0x: It May Be Worth It

The name itself — 0x (ZRX) — looks very unusual, which can not be said about the cryptocurrency itself. At first glance, 0x practically does not stand out from dozens of similar projects using the ERC-20 protocol. However, a latest noticeable increase in its rate makes us take a closer look at it.

The main purpose of 0x, as follows from the description on the official website, is decentralized p2p exchange (DEX) based on the Ethereum blockchain. The project itself is not an exchanger but provides the infrastructure for its creation. The developers claim that 0x is suitable for almost any market: "from the sale of in-game items to financial instruments and previously unseen assets." The project’s advantages include support for all Ethereum-based tokens, a reduced entry threshold due to the “network liquidity” system, which creates a “seamless order flow” through a network of interconnected trading platforms and decentralized applications.

History and Development

0x was created in 2017 by engineer Will Warren and former trader Amir Bandeali. The co-founders did not have serious experience in the development of cryptocurrencies, which, however, did not stop them from attracting competent specialists and raising $24 million during a two-stage ICO. Then, 500 million ZRX tokens out of 1 billion were sold. The remaining tokens were distributed between the company, developers, advisers, and others, mainly with a four-year transfer schedule.

Over time, the project developed — protocol updates brought advanced functionality. However, this did not help 0x in avoiding the high volatility of 2018, which ultimately ended in a significant depreciation: if in January 2018 ZRX reached its peak at $2.04 for one token, then a year later it cost only 28 cents. The decision of the SEC, which fined the owner of one of the DEX exchanges for several hundred thousand dollars, also played a negative role. Although EtherDelta, which came under this blow, was not related to ZRX, this incident made the future of such exchanges less certain.

But these troubles failed to drown 0x. In December 2019, the 0x protocol was updated to version 3.0. Smart contracts appeared were implemented, which allowed aggregating the liquidity of decentralized exchanges. Also, the staking mechanism, the ZEIP-31 initiative, was introduced. The latter made the use of 0x more profitable. Now market makers, along with their ZRXs, received economic management of the protocol and were rewarded for participating in the economic life of the system with Ethereum awards. It seems that it was the innovations in the new version of the protocol that allowed this cryptocurrency to go to the stage of growth again. The uptrend that began at the beginning of the year was interrupted by the crisis caused by the COVID-19 pandemic, but continued in April. In just a month, the cost of ZRX rose from $0.14 to $ 0.39.

Where is the trend going?

It is hard to say how this success story will end. Some analysts believe that what is happening with ZRX fits into the framework of the classic “pump and dump” scheme, the essence of which is to artificially inflate the value of the cryptocurrency by influencing the market, withdraw the funds at the peak of the price that will lead to inevitable collapse. As an argument, there is a discrepancy between the daily activity of 0x users and the increase in price. The increasing number of social media mentions is also alarming, because the interest among a wide audience often marks the end of growth.

On the other hand, the above arguments, to put it mildly, are not indisputable and technological achievements of the 0x company are real. Now, 0x developers are prioritizing the Matcha project - a DEX interface on their own protocol.

At the time of writing, ZRX rate is around $0.38, and there is a slight decline.

Image courtesy of: Bit Expert