Intro
0x was an open protocol (launched 2017 by ZeroEx Labs) for peer‑to‑peer trading of ERC‑20 tokens on Ethereum. It provided smart‑contract settlement primitives and a standard order format so apps could build decentralized exchanges and relayer services. The protocol’s native token was ZRX, used for governance and staking.
Key points
– Founding and fundraising: Founded by Will Warren and Amir Bandeali in 2017; initial coin offering raised ~$24M, with further capital raises in 2021–2022. A 0x DAO was launched in 2021 to govern development.
– Architecture: On‑chain settlement smart contracts plus off‑chain order relayers. Orders were signed off‑chain (reducing gas) and filled on‑chain via a standard message format that contained asset, price, expiry, and party identifiers.
– Roles:
• Makers: post orders / provide liquidity.
• Takers: fill orders / remove liquidity.
• Relayers: host order books and broadcast orders (not custody providers).
• Exchange proxy: a contract abstraction allowing composite trade execution and routing.
– Token mechanics: ZRX was used for protocol governance and could be staked to earn ETH liquidity rewards.
– Regulatory outcome: In September 2023 the U.S. Commodity Futures Trading Commission (CFTC) charged and settled with ZeroEx, ordering cessation of exchange activity and imposing a $200,000 penalty for operating as an unregistered exchange/futures/swap facility. That action significantly curtailed project activity.
– Status and market: Post‑action development and community activity declined. ZRXto trade on secondary markets; reported market metrics in the source included a market cap (~$307.6M) and circulating supply (~847.5M) as of the article’s date, but these figures change over time.
– Outlook: Prior to regulatory action the protocol was a widely referenced DEX primitive; the CFTC enforcement materially altered its operating model and prospects unless the project pivots, registers, or otherwise restructures.
Brief example
Alice (maker) signs an off‑chain order specifying 100 DAI for 0.05 ETH and posts it to a relayer’s order book. Bob (taker) finds the order and submits a transaction to the 0x smart contracts to fill it. The contract verifies Alice’s signature, transfers tokens on‑chain between Alice and Bob, and records the trade. If Alice had staked ZRX, she might receive a small ETH reward distributed by protocol incentives. After the 2023 CFTC action, similar live exchange services provided by the protocol’s operators were ordered to stop.