0x is a protocol on the Ethereum blockchain designed to facilitate the exchange of ERC-20 tokens in a faster and cheaper way. If you are unfamiliar with the 0x Protocol, read our introduction to 0x.
0x Protocol is a platform for decentralized exchange of tokens, which many crypto users agree is superior, and more in keeping with the purpose of blockchain, to using centralized exchanges. In centralized exchanges, the exchange holds your funds for you, they charge fees, and they hold on to your personal data.
In a decentralized exchange, however, your funds stay in your wallet, the exchange doesn’t charge fees (although it might be expensive to use because of transaction fees on the blockchain), and you can be anonymous.
The 0x protocol is different from the usual decentralized exchanges because it limits the number of transactions happening on the Ethereum blockchain by having off-chain order books. This means the transaction only goes on the blockchain when the order is set to be filled, making it cheaper than other decentralized exchanges who have to host order books on the Ethereum blockchain.
0x Protocol v1.0 went live on the Ethereum blockchain on August 14, 2017. The token sale took place the very next day on August 15, 2017, and it happened on the 0x platform. Since then, more than 30 dapps and relayers have been developed on the 0x protocol.
According to the 0x blog, the total trade volume of all relayers on 0x Protocol is over $170 million. However, to achieve the growth that the 0x team envisions, there is the need to address the user experience challenges that comes with using decentralized exchanges.
This necessitates the creation of the 0x Portal.
The 0x Portal
The 0x Portal is the dapp that brings a user into the world of 0x in the most simple and efficient way, allowing them to seamlessly discover the relayer fit for their purpose.
A relayer is a platform that hosts off-chain order books for the exchange of ERC-20 tokens on the 0x protocol. Exchange of tokens cannot happen on 0x without a relayer. A relayer is where orders to be filled can be seen. The order goes on the Ethereum blockchain when there is another order that fills it. New relayers are coming up on the 0x platform with different niches, which creates a need for a portal that enables users to find the right one they need without wasting time.
There are 2 primary functions of the 0x Portal:
- User education and on-boarding
- Relayer discovery
User Education and On-Boarding
Teaching a user how to interact with a decentralized exchange is difficult. This creates a major barrier for user growth, as users can easily get frustrated and seek an alternative. The 0x Portal solves this problem by providing an intuitive UI by which users engage in trading in just 3 steps. The steps are shown in the figure below:
As you can see in the figure above, the first step is to add ETH to the wallet connected. The second step is to wrap the amount of ETH intended for trading. Wrapped ETH, known as WETH, is an ERC-20 version of ETH on the 0x protocol.
The purpose of WETH is to simplify trading for users. The WETH can then be used to trade and unlock tokens on any relayer of choice. The WETH can also be unwrapped back into ETH at will.
The purpose of this is to increase the number of users that use a relayer for the first time. Also, the portal will serve as a base for future user education.
Relayer Discovery
The 0x Portal is also intended to increase the exposure of relayers. Instead of users finding out about relayers independently, the 0x Portal creates the destination where all relayers can be exposed to users. It is important that users get to spot the right relayer for their niche to execute their trades. The portal also works with Toshi and Cipher.
Upcoming Features
Upcoming features planned on the 0x Portal to make it easier for users to find more interesting markets include:
- Searching and filtering relayers
- Improve WETH flow
- Deep linking directly into specific relayer market
- NFT support in the wallet component
- Education for the 0x v2.0 migration
- Better visualization and management of pending transactions
- Localization
Final Thoughts
0x Protocol believes in a future where most values are tokenized. Tokenized value must then be able to flow freely and easily. The 0x Portal brings ease and simplicity to the decentralized exchange of value. While centralized exchanges are still preferred by many at the moment, 0x believes that will change as fees charged by centralized exchanges increase in the next few years, triggering an exodus to find an alternative. 0x Protocol is preparing itself to be the best alternative.
The 0x Portal sets the pace for the upcoming 0x protocol v2.0, which is expected to go live on the mainnet in July or August 2018.
Get more updates from 0x through Twitter and their blog.
