# 0x Protocol (ZRX) — Overview and Shutdown
## What It Is
The 0x protocol was a set of smart contracts and message formats built on the Ethereum blockchain to enable peer-to-peer trading of ERC‑20 tokens (fungible Ethereum tokens that follow a common standard). Launched in 2017 by ZeroEx Labs (co‑founded by Will Warren and Amir Bandeali), 0x provided the plumbing for decentralized exchanges and trading interfaces rather than operating as a single centralized marketplace.
The project issued a native token, ZRX, which served two main functions: governance (allowing token holders to participate in protocol decisions) and staking to earn ETH rewards for liquidity provision. The protocol attracted an initial coin offering that raised roughly $24 million and later raised additional capital in 2021–2022, but it did not remain free of regulatory scrutiny.
## How It Worked
0x separated order creation and settlement into off‑chain and on‑chain components to reduce on‑chain costs. Key participants were:
– Makers: parties who posted orders to an off‑chain order book and supplied liquidity by creating trade offers.
– Takers: parties who accepted available orders and immediately executed trades, thereby removing liquidity.
– Relayers: entities that hosted and distributed order books so makers and takers could find each other; relayers did not settle trades directly on‑chain but facilitated order discovery.
Orders used a structured message format containing fields such as the token pair to trade, price, expiration time, and the identities or addresses involved. Once a maker and taker agreed, smart contracts on Ethereum performed settlement and enforced the business logic (validating signatures, transferring tokens, enforcing expirations). The protocol also provided an “exchange proxy,” a contract abstraction that multiple applications could use to build trading features without rewriting core settlement logic.
ZRX functioned as the governance and staking token. Holders could vote on protocol upgrades through a decentralized autonomous organization (DAO) created in 2021, and they could stake ZRX to earn ETH liquidity rewards intended to incentivize market‑making.
## What Happened
Despite its technical design and governance model, regulatory enforcement intervened. In September 2023, the U.S. Commodities Futures Trading Commission (CFTC) filed charges and reached settlements with ZeroEx, Inc. (the corporate operator) and two other DeFi operators. The CFTC alleged operation as an unregistered