Let's get something out of the way first. 0x is pronounced "zero ex" as opposed to "ox" like the animal. That was bugging me so I thought I'd throw that in there. Anyways, this Reddit thread is buzzing about what they're calling "The Second Coming" of 0x.
0x version 2.0 has just been announced at the Fluidity Summit and there's a lot you need to know about the changes that have been made. First, let's look at what 0x is so that we can better understand this latest update.
According to them, 0x is "an open protocol that facilitates trustless low friction exchange of Ethereum based assets."
A bit of a mouth full, I know, but 0x isn't that difficult to understand.
With the sheer amount of ICOs and coins floating around out there, it can get pretty chaotic. There seem to be new coins popping up constantly and it's getting difficult to keep up. Give it a couple of years and don't be surprised if you see thousands of companies and assets being digitized on the blockchain.
0x's mission is to make it easy to go from one token to the next on the blockchain.
0x is a protocol for decentralized exchange. Keep in mind that 0x doesn't run its own decentralized exchange. However, they make it easy for anyone else to do so by using their messaging format, their system of smart contracts and their developer tools.
There are three different classes of users in the 0x ecosystem:
Makers - makers create off-chain orders that are cryptographically signed with their private key
Relayers - publicly broadcast the orders of the makers to make it easier to find counterparties for these trades
Takers - find orders on relayers and fill orders at which time the orders are submitted to smart contracts where they are settled and the actual exchange of coins take place
You could look at 0x as a set of rules of how you can go about exchanging from one token to another if you use the 0x platform.
Why should you care about 0x?
0x is trying to make transactions from one token to another a whole lot faster. They're also trying to reduce costs. Exchanges such as Kraken can be pricey, especially for companies that are just starting up and trying to get their first projects off the ground.
Ultimately 0x is attempting to foster the speed of the Ethereum network and attempting to build partnerships and goodwill amongst various companies.
Version 2.0 of 0x
Here are the changes you'll find with the launch of version 2.0 all of which you can find in the live stream of the Fluidity Summit:
The below information is explained in-depth around 2:09:20 in the video. Also, visit www.fluiditysummit.io to view the program and schedule of the Fluidity summit.
- The information below was taken directly from the linked video
1) Supporting Arbitrary asset types
Version 1 only allowed for trading of ERC20 tokens. With the new version 0x is making it very easy to add asset types to the protocol without having to upgrade the entire protocol.
0x will support ERC20 and ERC721 (NFT) tokens out of the box. Potential future assets: ERC223, ERC777, ENS names, and security tokens.
2) New signature schemes
Different schemes have varying degrees of security, flexibility, and ease of use.
In addition to supporting ECDSA, EIP712, and Trezor signatures, users will be able to define their own verification functions within smart contracts(allowing for multisig, BLS, ring singnatures, etc)."
3) "Filter" smart contracts
It is now even easier to integrate 0x into external systems of smart contracts.
Developers can create contracts that add logic before/after interacting with orders. Relayers enforce that orders are routed through these contracts, enabling ideas such as permissioned liquidity pools.
4) Additional trading functionality
New features have been added to take full advantage of the trustless nature of blockchains.
Traders can now match orders atomically with no upfront capital, drastically lowering the barrier to entry for arbirageurs and matching engines.
Additionally, it is now possible to bulk cancel any number of orders with a fixed size transaction, lowering costs for frequent traders."
Ultimately 0x protocol 2.0 will be much more flexible and easier to build on top of and it will be able to much better handle the emergence of any arbitrary asset types.