The Complete Guide to the 0x

• Team
• 0x Products
  • 0x Mesh
  • Matcha
  • 0x Instant
  • What is 0x Matcha and How Does it Work?
  • Connecting on Matcha
  • Trading Interface
• How to Trade
  • Market Orders
  • Limit Order
• Trading Fee
• Service Locations, Legality and Listings
  • Token Listing
  • Security
  • 0x API
• Conclusion

The irony in today’s digital crypto exchanges is that the platforms are centralised. There’s a single authority who controls the whole ecosystem of an exchange, right down to holding the assets of their users, with the ability to stop, reverse and even cancel trades. Decentralisation has always been the cornerstone of cryptocurrencies and unfortunately, exchanges that claim to offer the best of cryptos violate this basic principle.

One of the first forms of Decentralised Finance (DeFi), 0x is a digital asset exchange protocol that’s among the pioneers of peer-to-peer exchanges that harnesses the power of blockchain itself. The exchange itself is decentralised, without the need of an authority to which users have to ask permission to join the platform (registration), trade or even handing over their assets.

0x Team

More like a trading market than a cryptocurrency exchange, 0x is a protocol that works at the backend to connect traders directly, without the need for a centralised server. The platform was set up in October 2016 under the development program of 0x Labs by Will Warren and Amir Bandeali.

Will Warren

Will Warren, as a Co-Founder of 0x, has been the CEO since its inception. A B.S. in mechanical engineering, Will graduated in 2013 from the University of California, San Diego. During his engineering studies, Warren showed keen interest in finances. He was an active participant in his university’s Undergraduate Investment Society and Student Foundation Investment Committee.

Warren started his PhD in Structural Engineering in 2014, but after two years decided to stop and concentrate on 0x.

Will Warren’s Professional Experience

Warren’s professional experience is mostly concentrated in the research side of mechanics and data handling:

• UCSD Coordinated Robotics Lab: As an undergraduate student researcher, Warren spent 1.5 years (January 2012 to June 2013) working on developing computer-aided visual systems for mobile robotic applications.
• Los Alamos National Laboratory: Warren dedicated the next one year and three months (June 2013 to August 2014) to his post-baccalaureate research at Los Alamos National Laboratory. The research institute holds a special place in history, setup in World War II for research into the first atomic weapons (the Manhattan Project). The institute has been at the forefront of technological development ever since. Warren was involved in the Dual-Axis Radiographic Hydrodynamic Test Facility (DARHT) and was part of one of the diagnostic groups. During the same time at Los Alamos, Warren was also promoted as a Graduate Research Assistant, helping in different research experiments related to laser diagnostics, optical and signal processing (From June 2015 to August 2016).
• 0x Labs: A paradigm shift in career, Warren started working in the cryptocurrency sector, leveraging his understanding of research methodologies, data handling and finances to co-found 0x Labs, an institute aimed towards empowering the public by creating the most advanced decentralised cryptocurrency and digital asset exchange of its time. Warren has been the CEO of 0x since its inception from October 2016.
• Basic Attention Token: Warren was involved with Basic Attention Token (BAT) project as a technical advisor for three months (March to May 2017) with respect to integration and implementation of Ethereum-based smart contract technology.

Amir Bandeali

Amir is the second Co-Founder of 0x and is the CTO of the company. He has a financial background, with an undergraduate degree in Finance from University of Illinois, graduating in 2012.

Amir Bandeali’s Professional Experience

• Chopper Trading: Amir started his career as a Trading Assistant in the capital market trading firm, working for one year and nine months (from August 2012 to April 2014). He was then promoted to a full trader working roughly for the next year (until January 2015).
• DRW: Amir switched jobs and started working for DRW, another trading firm, working for the next one year and seven months (January 2015 to July 2016).
• 0x Labs: Co-Founding the decentralised exchange protocol and platform with Warren, Amir looks after the technical works of the platform as its CTO (from October 2016).

0x Products

0x is not a cryptocurrency platform in the traditional sense. Decentralised, it’s a blockchain protocol that allows for peer-to-peer connectivity, letting people and organisations from all over the world to directly swap their digital assets without the involvement of any intermediary party. 0x offers the following interfaces (or products) based on its protocol:

0x Mesh

The 0x Mesh is all about accessing and connecting to token markets in a permissionless manner. It's highly decentralised and a true representation of what blockchain is all about. There are no restrictions when it comes to listing assets, is accessible from anywhere on the planet, and is free of censorship.

Mesh can be accessed through three different ways, each with its own characteristics:

• Mesh Browser Node: For any person or organisation who wants to create their own decentralised trading network, the Mesh Browser Node is run by the users of that particular trading network. This is a serverless setup, requiring no central computer at all. 0x also doesn’t charge anything for it. Example of a Mesh Browser Node is Auger.
• Mesh Node: If anyone wants to run their own node and become part of a trading network and the larger 0x Mesh, the node is run by the person or organisation intending to operate it. 0x charges an average of $5 to 10 USD per month for the services rendered.
• 0x API: 0x has created its own custom API for direct accessing of the mesh through a programmable interface. The 0x API is a ready-to-use service with a small degree of central authority, as it allows the API operator to create limits in the trading trades and even allows for blacklisting of tokens within the second layer trading environment.

Matcha

The end-user interface for the trading environment provided by 0x, Matcha connects to 14 exchanges at the same time to allow for permissionless and instant trading of crypto assets. The trade orders are routed by the 0x intelligent system to give traders the best rate possible. All trades are executed through Ethereum-based smart contracts.

The backend of Matcha is powered by its own 0x API, which collects information from the sources, displaying the best trading rates and all the associated trading fees for the users.

0x Instant

The simplest form of crypto trading available, the 0x Instant is a small set of code that anyone can integrate into their website to give their readers and visitors the chance to make instant trades of their cryptocurrencies.

Instant supports a number of ERC-20 and ERC-721 tokens, enabling people to trade and purchase different types of digital tokens, from stable to utility coins and even non-fungible tokens. Website operators can use the Instant Configurator to customise the trade snippet through:

• Selecting their liquidity source from three different options
• The number of different tokens offered
• The ETH wallet where the transaction fee will be deposited
• The percentage of fee charged per purchase (up to 5% in affiliate fees)

Selecting these options will instantly change the coding of the snippet available on the page, which can be then copied and integrated in any webpage.

The front-end user interface is simple and there are a number of ways it can be customised by using 0x’s Asset Swapper engine.

What is 0x Matcha and How Does it Work?

Matcha is a decentralised exchange that is based on its 0x protocol. The protocol allows for peer-to-peer exchange of Ethereum-based assets. The exchange doesn’t require any signup or deposits for a user to start using the platform.

Users can connect their compatible wallets directly to Matcha to find the best trading rates available. Smart contracts on Matcha ensure that asset swaps from both ends are executed seamlessly and without a hitch. Once a trade is started, the relative assets are deposited in the smart contract, swapped, and the exchanged tokens are deposited in the wallets.

0x developers understood that many exchanges make it very difficult to trade due to the steep learning curve required to understand the complex information display. 0x Matcha has been designed keeping in mind the average user, the interface clean and neat that doesn’t have information overload.

Matcha has 46 different tokens available for trade currently, with plans to integrate as many tokens as possible.

Connecting on Matcha

Unlike centralised crypto exchanges, there is no need to create logins and sign up for Matcha. All the users need is a compatible wallet that has supported assets. Since traders’ wallets are directly connected and the platform never holds the cryptos, there is no deposit or withdrawal fees associated. Censorship free and without any interference of any party, there are no trade limits either.

To start trading, users need to first have a compatible ETH wallet. Currently, Matcha supports MetaMask for desktop computers, Coinbase Wallet and WalletConnect for mobiles and Bitski for web-based ETH wallets. There’s no support for hardware wallets as yet, but the Ledger Nano and Trezor can be connected via MetMask. 0x, however, advises to avoid this method since there are issues in executing.

Users can head over to the Matcha trading page and click on the Connect Wallet text on the top-right side of the screen. There’s a list of available tokens for trading on the page, segregated in cards. Each card contains data about the token such as the ticker name, current price in USD, and the increase or decrease in the last 24 hours.

On the right side, just above the cards, there is a filter to make it easier for traders to select the tokens they want. Tokens and their cards can be listed in four different ways, namely alphabetically, market capitalisation, volume and top movers.

Trading Interface

Clicking on any card will take the user to the trading interface. In line with 0x’s mission of making trading of digital assets easy, the interface is very plain and uncluttered. Where centralised exchanges have graphs such as candlestick supported by complex data like MACD, Bollinear, and moving averages, which professional traders can make sense of, most of the screen in Matcha is taken up by a simple token Price or Depth graph. The Price graph comes with timeline options of 24 hours, one week and one month. Moving the cursor on the graph will display the value of the asset in terms of USD at the selected time or date.

In the Depth graph, the asking and bids are displayed. The bids are on the left side, coded in green colour, while the asks are red and on the right side. Hovering the cursor on the graph will show additional information, such as the breakdown of the orders from the different exchanges with which the 0x is connected.

0x doesn’t display trading pairs in the traditional sense. Since the trading is peer-to-peer, the base token depends on the availability of users who are willing to commit their tokens to the liquidity. Below the graph, 0x displays the base tokens currently available against the selected token.

A couple of lines on the background of the token, total supply, 24-hour trade volume and the market capitalisation rounds up the trading information. The order section is on the right side  of the graph, allowing traders to create their orders.

How to Trade

Continuing its trend of unorthodox methods of trading, 0x doesn’t have any buy or sell orders. Instead, it just has orders. Users simply trade in their assets for the base pair one. If users haven’t selected their base pair already, they can also select from the order section.

Market Orders

After selection of the base pair, users can enter the amount of the base token they want to use to purchase the asset. The amount of receivable assets will be displayed in real time by 0x. Conversely, traders can input the receivable asset to find out how much they will pay for it.

As a simple market order, the trader has no control over the rate of exchange. 0x will, however, help the trader in selecting the best possible conversion rate from 14 different exchanges globally. The user can press the Review Order button at the bottom of the order section and finalise it for the 0x smart contract to take over and swap the assets, depositing the purchased coin in the trader’s wallet.

There are also advanced settings for Market Orders on 0x, available through the Settings button on the top right of the order section:

• Slippage: At times, the expected price for a market order is different from the actual one when the order is executed. This is due to market volatility. A fraction of a second delay can cause the price to change. Although this might not be much of an issue for small traders, large-volume orders can witness significant dips in profitability. Users can select the slippage they are willing to accept ranging from 1% to 5% at 0.1 increments using the slider.
• Exchanges: 0x uses 14 different exchanges to select the best price available for a trade automatically. Users can override this here by selecting how many exchanges the 0x smart contract should use. This can help at times due to lower transaction fees on some of the platforms.
• Gas Price: Since all of the tokens and the trading environment is based on the Ethereum network, using it as a backbone, there’s a little Ethereum charge in the shape of Gas. Users can also set this with three options: Fast (80 Gwei per trade), Very Fast (88 Gwei), or Custom, with their own choice of Gwei value.

Limit Order

Limit Orders give users more control over their trades. When selecting a limit order, users are given two more options in the order section. Right under the paying asset field, users have the ability to enter their desired exchange rate. This helps them in defining their terms of trade and can use it to buy assets when there’s a dip in the market and then later on sell at a higher rate for profits. And vice versa, they can use limit orders to sell their assets when they believe that after a certain rate, the value will decrease, thereby hedging their money.

Under the price field, users have the final option of setting the time frame of the order. If another trader who’s willing to exchange assets within the time isn’t found, the order is automatically cancelled. Time frames are fixed to 10 minutes, one hour, 24 hours, three days, and seven days. The user can review their orders and finalise them after entering all of the data in the fields.

Limit orders don’t have ETH pairs though and 0x doesn’t provide any reason for it. To allow users to continue to trade for ETH, 0x utilises Wrapped ETH tokens, WETH. Wrapped tokens are basically ERC-20 compatible tokens that follow the value of the underlying token or coin. This is achieved either through use of smart contracts to manipulate supply and demand to avoid the peg to fail, or through a 1:1 asset backing.

To give the best trading rates, 0x uses a number of exchanges to seek out the lowest possible value. The inputs come from 0x’s own Mesh, private market makers on 0x, Balancer, Bancor, Curve, DODO, Kyber Network, mStable, Mooniswap, Oasis, Shell Protocol, Sushi Swap, Swerve and Uniswap. The updated list of sources can be viewed here.

Trading Fee

Cryptocurrencies were built with extreme flexibility in mind. As peer-to-peer transmission of tokens, there are no intermediaries that require a fixed fee. The sender only pays for a fee charged by the network nodes to note down the valid transactions on the blockchain ledger.

0x is decentralised and since all transactions are done directly, there’s a small variable fee that is charged per trade -- two in fact. The first, as already described above, is the Gas fee for the Ethereum network. The second is the 0x fee, which is also charged per transaction and provided to the order makers as incentive for providing liquidity to the market.

The 0x fee is a simple calculation, involving the multiplication of the transaction Gas value and the protocolFeeMultiplier. The protocolFeeMultiplier is a varying value that’s calculated on the basis of a set percentage of the Gas used to fill a single order. Traders can check out the protocol multiplier on this page. Recently, 0x has introduced zero protocol fees for all on-chain liquidity sources, such as Kyber, Curve and Uniswap. This means that if the user trades from these exchanges, there will be no protocol fee charged and the user only pays for the Ethereum network Gas.

When limit orders are created, they are stored off-chain on 0x, thereby negating the need to write on the blockchain. A compatible order will cause the original limit order to be placed on-chain and the taker will be charged a relevant fee. Through this, limit order makers can also trade for free.

Another advantage of 0x is that since the trades are made directly from one user wallet to another, there’s no need for depositing or withdrawing assets on the platform. This results in zero deposit or withdrawal fees on the platform.

Service Locations, Legality and Listings

0x has extensive Terms of Service that describe different limitations and bindings that its users have to follow. The document is neatly divided into different sections, each detailing a specific aspect of the exchange:

• Services: 0x claims that since the protocol is a distributed ledger technology, the platform has no control over the transactions made, including the fees. Similarly, the users must agree that they’ll not take part in any activity that violates applicable laws, anti-money laundering, and anti-terrorist financing.
• Suspension and Termination of Services: 0x is self-operating and as such, if there’s any change in the services or even termination, it’s due to the public governance agreeing to it. 0x will not be held responsible for any losses due to the changes in services.
• Jurisdiction Limitations: People who are residents and citizens of the Cayman Islands, United States, or other jurisdictions where trading and holding cryptocurrencies or tokens are illegal aren’t allowed to take part in the 0x protocol trading environment.

The jurisdiction and applicable law clauses in the Terms of Service are an ironic addition. The 0x protocol is completely decentralised with a permissionless environment. This means there isn’t any way that a person or an organisation can be stopped from using the services. The platform doesn’t have any registration process, AML/KYC checks or and documentation of users. The trades are executed through smart contracts and there isn’t any involvement of the platform apart from providing exchange rates.

There is, literally, no censorship or roadblock that the platform can use to stop people from trading on it apart from suspending the complete service.

Token Listing

On the larger scale, the 0x protocol allows anyone to create their own digital asset market to trade their tokens and coins. However, when it comes to Matcha, the platform has its own listing process. 0x is always welcoming tokens that have a strong market demand and liquidity. The platform also requires the tokens to meet regulations and relevant laws for qualification. Projects that are interested in having their tokens listed can contact 0x at this email: support@matcha.xyz

0x will evaluate the token and if it falls within their criteria, they’ll proceed with negotiations for a full listing.

Security

All the security aspects of decentralisation come along due to its use of blockchain, making 0x one of the most secure trading protocols and platforms. The trading platform is also verified from third-party blockchain auditors including ConsenSys Diligence and Trail of Bits. Their audit reports are public and available for anyone to view.

0x API

0x API acts as a top layer and allows people to access the functionalities of 0x. The API has been custom created that allows other platforms or programs to connect it to gain DEX liquidity. All other DEXs that are connected to 0x also become accessible through this.

Using smart contracts lets users concentrate on finding their relevant tokens and products, letting the coding do the work of finding the best rates. The Smart Order Routing splits the order across several exchanges on the network so that each order is filled with the minimum amount of slippage.

The API can be used to create orders that can be used on-chain to settle transactions. Since the smart contracts have all the necessary wallet information, there’s no need to worry about a third party accessing the funds. This means there’s no need for complex hoops to jump through for creating API keys. All traders need to do is to get a quote using the API, transmit it to their smart contract and let it execute for the best price possible. The API even lets traders leverage loans for margin trading.

Conclusion

Many people will find 0x a bit tricky to understand. Centralised exchanges offer a front-end user interface that’s created to be user-friendly and easy to use. Many of 0x’s services require a basic understanding of blockchain, smart contracts and their coding. Matcha is a front-end decentralised exchange for people who don’t have any coding skills, but still prefer to use decentralised trading due to security issues to which centralised exchanges are prone.

Matcha has limited trading pairs and functionalities. There are only two options of orders, namely Market and Limit. No order books exist as the 0x protocol takes care of the order request using available liquidity. The simplicity seems to be deliberate though. Adding in complexities would make it difficult for many people to trade, defeating its purpose.

Extremely secure, permissionless, and non-custodial, 0x is a good representation of what a decentralised exchange should be.

Cryptocurrencies prices are highly volatile in nature. Readers are advised to do their own research before buying or selling any digital asset. All trades made are final and can’t be reversed. Though decentralised exchanges offer more security and are non-custodial, the governing community can vote to make any changes to the offered services and even fork the blockchain. Diversify your investments and trade only the amount you are willing to lose.