Decentralized Exchanges — 0x (“ZRX”)

In recent weeks there have been a number of hacks on high-profile exchanges. Such hacks are nothing new to the crypto community, the most infamous of which was the hack of Mt. Gox back in early 2014.

This is a trend that I personally expect to continue as crypto-asset values rise. Centralized exchanges are the holy grail for hackers, who can escape with hundreds of millions of dollars in assets in an instant.

Isn’t it ironic that the assets of a de-centralized future are currently facing a centralization problem?

Fortunately for the crypto community, Decentralized Exchanges (“DEX”) appear to be primed for mainstream adoption. Unlike their centralized counterparts (ie GDAX, Binance, Bittrex) which have a singular point of attack, decentralized exchanges alleviate this issue by allowing for peer-to-peer trading on a distributed ledger.

There are several decentralized exchange crypto-assets emerging, including: Waves (“WAVES”), BitShares (“BTS”) and my personal favorite 0x (“ZRX”).

0x is an open protocol that allows for decentralized trading of Ethereum ERC-20 assets. The ZRX token is used to pay for trading fees on any exchange running off of the 0x protocol.

The key to 0x is that developers use the 0x protocol to build their own custom exchange apps. One such example of this is “Radar Relay”, an incredibly easy to use decentralized exchange that integrates directly with any Ledger hardware wallet. For any experienced crypto trader, you will find such developments intriguing to say the least.

By effectively cutting out the middleman, decentralized exchanges will save users significant amounts of capital that would normally be spent on trading fees to a centralized platform. Additionally, since trades are made peer-to-peer and the users control the funds, the entire process is much more secure for all parties involved.