Will Warren (CEO) : B.S. Mechanical Engineering from USCD
Amir Bandeali (CTO) : BSc. Finance (Minor in Computer Science) UIUC -Despite working as a trader, built up his CS skill-set on the side
a) Risk of getting hacked because of single point of failure thereby resulting in loss of millions of dollars.
b) Risk of getting shutdown due to legal accountability.
These exchanges have to follow the law of the land, their long-term operation depends on the countries they are based
on. Example: Currently in my home country India, traders live at a risk that the exchanges would become non-
operational anyday after the RBI’s order to banks to stop supporting cryptocurrency exchanges.
Basically, these suffer from the issues that all centralised services suffer from.
a) Custody of your crypto/digital asset remains in control of the individual thereby eliminating risk of lose of funds.
b) Trustless : You only need to trust the smart contract code which is open source thereby ensuring that no one gets preferential treatment.
In theory, a decentralised exchange can be better than a centralised one, so what features do decentralised exchanges lack when compared to their centralised counterparts?
Some Prominent Decentralised Exchange Projects:
Kyber Network
Bancor Network
Airswap
Etherdelta
IDEX
Stellar Term
0x is a protocol i.e. it’s public infrastructure, anyone can create a for-profit business (relayer) on top of it. The team made a decision to avoid building a walled garden as done by most models in the space.
The team raised just enough money privately to pay for the legal fees and to survive without thinking of a business model.
In a sense, it is solving a public goods problem (providing liquidity to various dapps) and the ICO model has facilitated the team to do that by providing them money to survive, build a team & financially benefit them if their project succeeds and price of their token rises!
At it’s core, 0x protocol is a message format:
Each order is a data packet containing order parameters and an associated signature. Order parameters are concatenated and hashed to 32 bytes via the Keccak SHA3 function. The order originator signs the order hash with their private key to produce an ECDSA signature.
You specify your intent to enter into a trade by specifying parameters like these in your message:
0x Architecture : OffChain Order Book, OnChain Settlement
We have three parties in the trade: relayer, maker, taker:
Note: The 0x team only maintains the trade settlement and governance smart contracts. The goal of 0x is to make upgrading of the contract through token voting. The team is thoroughly researching about governance (rumours about collaborating with Aragon team) including things like liquid democracy in which token holders can delegate their voting power to someone they deem capable to vote on their behalf.
Relayers host an off-chain order book (drastic reduction in trading fees) and broadcast to the public in anyway they see fit, eg: mobile app, website.
B- Model : Relayers can earn money in many ways, eg: charging trade fees, advertising on their website etc.
To understand how a relayer looks like, definitely have a look at Radar Relay.
List of relayers that will be (or are) using the 0x protocol :
Amadeus
DDEX
Dextroid
ERC dEX
Ethfinex
IDT Exchange
MobiDex
OpenRelay
Paradex
RadarRelay
SharkRelay
The 0cean
Token Jar
Tokenlon
In the next couple of years, there would be infinite number of tokens.
One single relayer can’t list all tokens on it’s platform.
There would be a handful of relayers that would dominate the market but they wouldn’t be able to research and list all tokens due to sheer volume of tokens.
As a result there would be hundreds of relayers catering to a particular niche of tokens, eg: relayers for listing real estate tokens would be very different to say prediction market tokens.
0x would allow for all these relayers to build on top of it’s protocol thereby providing liquidity to thousands or even millions of tokens.
0x is a governance token, it allows to upgrade the 0x smart contract overtime without bringing all of the markets on top of it to a halt.
It is also used for paying transaction fees to relayers, this feature ensures that all the stakeholders in the ecosystem have some amount of 0x tokens and are driven to participate in the governance process.
Social :
Show me some love by giving the upvotes! Also, I run a Blockchain youtube channel in which I make educational content and interview founders in the space.
Channel Link : https://www.youtube.com/arnavvohra7
