0x ($ZRX) could be a "pick and shovels" play for Decentralized Exchanges

Overview of the ZRX Crypto: 0x (ZRX.X or ZRX-USD) is a system of smart contracts that enables the trading of Ethereum’s ERC-20 and ERC-721 tokens. 0x connects market makers and liquidity providers to provide their exchange and all of its functions/applications. 0x enables the creation of decentralized exchanges on Ethereum’s (ETH.X) blockchain to facilitate permissionless value transfers. This is important as there are many benefits of decentralized exchanges which will be touched on later in this analysis. 0x simply provides the infrastructure necessary for others to build their own decentralized exchanges. ZRX coin currently has a 24-hour trading volume of $56M and the ZRX price is $0.74 (USD). Token Economics: 0x (ZRX) Information: As previously mentioned, 0x is focusing on providing the infrastructure to enable other to build decentralized exchanges, rather than them doing it by themselves. This is important to note because their token ($ZRX.X) is primarily used to vote on proposals. However, 0x has a ZRX staking mechanism that allows their users to provide liquidity in exchange for rewards (paid out in ETH). ZRX Coin is an ERC-20 token itself (definition can be found at the end of this analysis). 0x (ZRX) ICO: 0x had their ICO (Initial Coin Offering) in August of 2017, in which they raised $24M to fund their project. AS part of the ICO, 0x created and allocated 1B ZRX tokens as follows: 50% to the community/holders 15% was retained to cover ongoing expenses 15% to the developer fund (helping to grow the ecosystem) 10% to the team behind 0x (with a 4-year vesting schedule which concludes this August (Aug 2021)). 10% to initial advisors/investors Overall, 0x’s coin distribution is nothing to be worried about and allows room for the token to run. Vesting Schedule: As previously mentioned, part of the original coin offering included a 10% distribution to the team, which would be vested over a 4-year time frame. When looking at their wallets holding 0x, I found something quite interesting. Currently, there is a wallet that is used for the vesting of these coins. This wallet currently has a little over 50M shares, which translates into roughly $39.94M. You might be wondering, why does this matter? Well, this represents 5.43% of the supply, which means that these 5.43% of the supply will be available to sell within the next 20 or so days. If these team members decide to sell majority of their tokens when they become vested, then we might see a decline in the price of the coin on this day, or the next couple of days. If this were to happen it would take place between Aug 16 – Aug 18. Technology: ZRX Staking: Market makers provide liquidity to help the decentralized exchanges function properly. To encourage staking (thereby increasing liquidity) 0x offers monetary compensation and the right to vote on governance decisions. The ZRX staking rewards are based off of the fees generated from their orders and the size of their stake in ZRX. Liquidity Bridges: Liquidity bridges allow DeFi projects to access on-chain liquidity from decentralized exchanges, and 0x’s liquidity pool. Smart Contracts: Smart contracts enable market makers to send details about transaction/orders to that they can be executed according to plan. If the terms of the smart contract are met by both sides the transaction will complete, and the trade will be executed. Third Party Relayers: Third Party Relayers are responsible for maintaining the order-book (the historic data pertaining to buying/selling securities). These third party relayers will make a fee (similar to how exchanges make their fees/commissions. ZRX News: Brave Partnership: On July 7th 2021, 0x announced their partnership with Brave Swap. This partnership outlines Brave Swap’s use of 0x’s API which will be powering Brave’s platform. Brave is the most recent project to select 0x’s API to power their platform, and Brave believes that this partnership can help to make both Crypto and Decentralized Finance (DeFi) accessible to everyone. Problems: Front-Running: Front Running in crypto would entail paying higher gas fees to get your order executed quicker than other investors. In centralized exchanges, the act of front-running is illegal, however this act is sometimes performed in the word of crypto. This is a fear for 0x as they operate on Ethereum’s blockchain, which (at the time of writing this analysis) is not restricted. This is quite the problem for 0x, and they are actively looking for ways to combat this issue. Terminology: ERC-20 Token: A cryptocurrency that is stored and sent via Ethereum addresses. Transactions using ERC-20 tokens require gas to cover transaction fees. ERC-721 Token: ERC-721 is a token standard on Ethereum for NFT’s (Non-Fungible Tokens). Each coin is unique, and one coin cannot simply replace another. Permissionless: Blockchains that require no permission to join and interact with, these blockchain are also referred to as “public blockchains”. Decentralized Exchanges: Exchanges that are built on blockchains that allow their users to trade without an intermediary. Users own the coins that they purchase on these exchanges but are responsible for the security of these tokens. Gas Fees: The effort required to execute a smart contract on Ethereum’s blockchain. The higher gas someone has when looking to make a transaction, the more likely they are to get their transaction completed sooner. This is because miners (who validate the transactions) will choose to validate the transactions with more gas, meaning they get paid more to validate these transactions.

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CryptoCranium

Aug 1, 2021

11.22%

Change % Since Posting

0.82

Price When Posted

0.09

Change Since Posting

ZRX

0x

0.91

0.02
1.88%
Current Price

0x ($ZRX) could be a "pick and shovels" play for Decentralized Exchanges

bullish

Overview of the ZRX Crypto:

0x (ZRX.X or ZRX-USD) is a system of smart contracts that enables the trading of Ethereum’s ERC-20 and ERC-721 tokens. 0x connects market makers and liquidity providers to provide their exchange and all of its functions/applications.

0x enables the creation of decentralized exchanges on Ethereum’s (ETH.X) blockchain to facilitate permissionless value transfers. This is important as there are many benefits of decentralized exchanges which will be touched on later in this analysis.

0x simply provides the infrastructure necessary for others to build their own decentralized exchanges.

ZRX coin currently has a 24-hour trading volume of $56M and the ZRX price is $0.74 (USD).

Token Economics:

0x (ZRX) Information:

As previously mentioned, 0x is focusing on providing the infrastructure to enable other to build decentralized exchanges, rather than them doing it by themselves. This is important to note because their token ($ZRX.X) is primarily used to vote on proposals.

However, 0x has a ZRX staking mechanism that allows their users to provide liquidity in exchange for rewards (paid out in ETH).

ZRX Coin is an ERC-20 token itself (definition can be found at the end of this analysis).

0x (ZRX) ICO:

0x had their ICO (Initial Coin Offering) in August of 2017, in which they raised $24M to fund their project. AS part of the ICO, 0x created and allocated 1B ZRX tokens as follows:

  • 50% to the community/holders
  • 15% was retained to cover ongoing expenses
  • 15% to the developer fund (helping to grow the ecosystem)
  • 10% to the team behind 0x (with a 4-year vesting schedule which concludes this August (Aug 2021)).
  • 10% to initial advisors/investors

Overall, 0x’s coin distribution is nothing to be worried about and allows room for the token to run.

Vesting Schedule:

As previously mentioned, part of the original coin offering included a 10% distribution to the team, which would be vested over a 4-year time frame. When looking at their wallets holding 0x, I found something quite interesting.

Currently, there is a wallet that is used for the vesting of these coins. This wallet currently has a little over 50M shares, which translates into roughly $39.94M. You might be wondering, why does this matter?

Well, this represents 5.43% of the supply, which means that these 5.43% of the supply will be available to sell within the next 20 or so days. If these team members decide to sell majority of their tokens when they become vested, then we might see a decline in the price of the coin on this day, or the next couple of days. If this were to happen it would take place between Aug 16 – Aug 18.

Technology:

ZRX Staking:

Market makers provide liquidity to help the decentralized exchanges function properly. To encourage staking (thereby increasing liquidity) 0x offers monetary compensation and the right to vote on governance decisions. The ZRX staking rewards are based off of the fees generated from their orders and the size of their stake in ZRX.

Liquidity Bridges:

Liquidity bridges allow DeFi projects to access on-chain liquidity from decentralized exchanges, and 0x’s liquidity pool.

Smart Contracts:

Smart contracts enable market makers to send details about transaction/orders to that they can be executed according to plan. If the terms of the smart contract are met by both sides the transaction will complete, and the trade will be executed.

Third Party Relayers:

Third Party Relayers are responsible for maintaining the order-book (the historic data pertaining to buying/selling securities). These third party relayers will make a fee (similar to how exchanges make their fees/commissions.

ZRX News:

Brave Partnership:

On July 7th 2021, 0x announced their partnership with Brave Swap. This partnership outlines Brave Swap’s use of 0x’s API which will be powering Brave’s platform.

Brave is the most recent project to select 0x’s API to power their platform, and Brave believes that this partnership can help to make both Crypto and Decentralized Finance (DeFi) accessible to everyone.

Problems:

Front-Running:

Front Running in crypto would entail paying higher gas fees to get your order executed quicker than other investors. In centralized exchanges, the act of front-running is illegal, however this act is sometimes performed in the word of crypto.

This is a fear for 0x as they operate on Ethereum’s blockchain, which (at the time of writing this analysis) is not restricted. This is quite the problem for 0x, and they are actively looking for ways to combat this issue.

Terminology:

  • ERC-20 Token: A cryptocurrency that is stored and sent via Ethereum addresses. Transactions using ERC-20 tokens require gas to cover transaction fees.
  • ERC-721 Token: ERC-721 is a token standard on Ethereum for NFT’s (Non-Fungible Tokens). Each coin is unique, and one coin cannot simply replace another.
  • Permissionless: Blockchains that require no permission to join and interact with, these blockchain are also referred to as “public blockchains”.
  • Decentralized Exchanges: Exchanges that are built on blockchains that allow their users to trade without an intermediary. Users own the coins that they purchase on these exchanges but are responsible for the security of these tokens.
  • Gas Fees: The effort required to execute a smart contract on Ethereum’s blockchain. The higher gas someone has when looking to make a transaction, the more likely they are to get their transaction completed sooner. This is because miners (who validate the transactions) will choose to validate the transactions with more gas, meaning they get paid more to validate these transactions.
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Confidence

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