Disclaimer: This post does not provide or substitute for legal advice. When operating a relayer, there are a host of legal requirements to consider. Please consult your own legal counsel.

The appeal of building a platform for building marketplaces is that instead of a single entity trying to cater to all possible market niches, individual actors are incentivized to find and serve many markets, creating massive consumer surplus aided by the speed provided by shared infrastructure. This is a trend we have seen play out many times across a wide swath of industries, and it’s part of why we’re so excited to be building this core protocol layer at 0x.

Many platforms struggle to attract their initial builders, but we’ve been lucky enough to have over ten relayers live on the Ethereum mainnet, built on 0x, with many other relayers and protocols that extend the core 0x smart contracts in beta. I’ve had a chance to meet with a number of teams who are interested in building 0x relayers, but some have expressed some common concerns. Namely, while they agree that the world’s assets are becoming tokenized, they worry that some opportunities — such as tokenized real estate deeds — are too far off to start building for today, while the current ERC-20 exchange market feels too commoditized to make a dent as a new entrant. There are certainly many ‘trivial’ ways to diversify your exchange by slightly tweaking the interfaces or tokens offered, so we’re specifically interested in finding opportunities that need to be served by specialized businesses. We actually believe the current tokenized asset market is extremely underserved, and we’re waiting for new teams to start building.

Here are 18 ideas for products you can build using 0x today:

1. Stablecoin Converter

One of the most frequent criticisms of cryptocurrencies is that they’re subject to massive price swings. While these swings attract many speculators, they also scare off many users and limit dApp usage. Luckily, many teams are now working on stablecoins that are pegged to a single currency or basket of goods through various approaches. An educational on-ramp that also allows movement between different types of stablecoins could open the top of the crypto funnel to new users. Consider the approaches of:

An enterprising team could even capitalize on the small arbitrage opportunities that exist when stablecoins briefly drift from their peg.

2. Shorting & Margin Trading

With dY/dX launching margin trading and short positions later this year and b0x and Lendroid coming soon, the opportunity is ripe to build a derivatives-focused relayer. BitMex has made a name for itself in centralized exchanges by offering crazy leveraged options for particularly ambitious traders. Now, that same functionality can be built in a totally decentralized way. Want to YOLO 100x long on Dentacoin? I certainly don’t condone it, but now you can get that margin loan and batch fill the order with 0x. An enterprising relayer could even underwrite these loans, making money on interest as well as transaction fees.

The Holy Triumvirate of Decentralized Margin Trading

3. Locale-focused Relayers

Taking a successful business model in one country and porting it to another has proven to be a recipe for success in the traditional tech ecosystem, and it’s a pattern we see playing out again in the crypto exchange space. We feel that the benefits of decentralized exchange are particularly well-suited to this playbook given the lack of decent centralized exchanges in some countries as well as the often hostile regulatory environment that can threaten the closure of centralized exchanges and the seizure of assets. While one can certainly make “Relayer for Country X / Y / Z”, we feel a few opportunities are particularly well-suited and underserved:

India and Russia: a severe lack of crypto-to-crypto trading and an aggressive regulatory stance creates a great opportunity for decentralized exchange

Japan and Korea: strong demand for crypto trading in general, lack of trust in centralized exchange post-CoinCheck, and talent gap leaves an opening that a strong DEX can fill.

4. Decentralized Sports Betting

Augur and Gnosis are two awesome projects creating protocols for decentralized prediction markets — in short, a way to arrive at estimated probabilities and actual outcomes of particular events in a trustless way. The potential applications for these protocols are endless, but for the sake of brevity and near-term practicality, there’s a clear demand in the consumer sports betting market. Fan Duel and Draft Kings are dominating the industry, but remain tainted by shady practices. Augur and Gnosis markets fundamentally boil down to ERC-20 tokens that correspond to shares in different market (game) outcomes, and a strong product team could build a great app that abstracts away much of this complexity, leaving an awesome, decentralized Fan Duel killer.

5. Synthetic Stock Futures

Another killer app for Augus and Gnosis is creating markets for predicting stock price movements, effectively making synthetic (not settled in actual stocks) futures. The U.S. stock market has historically been one of the best performing (in aggregate) and investing in it (usually through an index fund) has been one of the surest ways to grow personal wealth. However, investing as a non-citizen remains difficult. There’s clearly strong demand for such a product — even domestically, we can view the rise of Robinhood as evidence of the power of democratizing access to U.S. stocks. A relayer could create markets for stock price movements and allow traders to swap corresponding ERC-20 outcome tokens.

6. Tether for Video Game Items

There’s a clear buzz in the Ethereum ecosystem around Non-Fungible Tokens now that the ERC-721 standard has been finalized and the first wave of NFT projects is starting roll out. However, there’s also a bit of a disconnect between the hype and user experience — many NFT projects are just banking on the success of CryptoKitties without developing compelling game mechanics that will make their app actually fun to use. Meanwhile, there’s a glut of in-game item trading for existing AAA games (to the tune of $50B) that is rife with fraud and hacks. A model similar to Tether, where off-chain assets are tied up and new tokenized assets are minted, could bridge the gap between the liquidity and usability of tokenized assets with the large existing fan base of games like League of Legends or Fortnite. The issuer of these new tokenized in-game items would naturally be well-positioned to run an exchange for trading them as well!

7. Compliant Token Relayer

While the market is still forming for tokenized securities, exchanges are taking steps to protect themselves from regulatory risk by enforcing KYC and removing existing tokens that are likely to be deemed securities. Decentralized exchanges, however, are still largely pseudo-anonymous — great for reducing on-boarding friction, but limiting the user base to retail investors. Relayers that are interested in future-proofing their business and attracting more sophisticated traders could tap into one of many off-chain or on-chain KYC solutions (potentially in conjunction with a Trade Execution Coordinator) to ensure the identities of traders and establish themselves as a legitimate DEX as the number of assets grows. They’ll also naturally be well-positioned to trade security tokens as that industry grows.

8. Dark Pool Relayer

Many teams are working on building their own decentralized exchanges or protocols focused on dark pools, private exchanges that allow large amounts of assets to be bought or sold without exposing these movements to the public and disturbing the market. Fundamentally, you can view dark pools as just special cases of counter-party finding and orderbook management that can still easily use 0x as the trade settlement layer. An “opaque relayer” could obfuscate their orderbook and provide just-in-time quotes for crypto assets to emulate the experience of using a dark pool.

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9. “The Sewer”

While 0x is great for ensuring a safe, decentralized trade settlement process, it still requires a centralized entity to pool orders and help traders find counter-parties. This isn’t an issue in most cases, but it presents an issue in locales with tight regulation with regards to unregistered securities or crypto assets generally. There’s clearly demand for this type of trading opportunity, but any centralized relayer opens themselves up to potential legal recourse if they try to capitalize on it.

0x orders are designed to be transferred through any arbitrary off-chain medium and while something like a relayer is the easiest way to relay this information, you can also relay this information through any number of P2P file transfer services, such as BitTorrent, WebRTC, or IPFS. A decentralized orderbook shared across one of these transfer protocols would allow traders in crypto-antagonistic locales or who want to trade less than savory assets to find each other and transact.

10. Mirror Trader

“Mirror Trading” involves mimicking the trades of more experienced traders with the bet that you will continue to beat the market alongside them. This is an existing practice in Forex markets, but we’re starting to see a few companies attempt to break into this space in crypto assets markets as well. Simultaneously, a few teams like Set and BSKT are working on the standards for grouping assets that underlie a mirror trading or index fund trading system. As all of these plans ultimately boil down to an ERC-20 token that can be easily traded, 0x can be used as the settlement backend for anyone who wants to offer a mirror trading or index fund trading system.

Prism, a mirror trading system for crypto assets

11. One-Click Trading

ShapeShift has risen to prominence by offering a simple way for new users to get started trading cryptocurrencies. Instead of having to register on an exchange, deposit funds, and navigate a traditional ordering interface, users are able to choose the asset they want and buy it at roughly market price in a few seconds. However, ShapeShift is still fundamentally a centralized service and comes with some of the limitations and risks associated with that.

We’ve outlined a way to achieve similar functionality to ShapeShift using 0x and we’re excited by the first steps companies like EasyTrade have taken in this space. When we release our open source forwarding contract and trade widget interface with V2 of the 0x protocol, we expect to see this “seamless trading” space explode as teams innovate on top of our base tools.

12. Token Sale as a Service

Many people don’t know that 0x actually used the 0x smart contracts to run its own token sale. By requiring Civic to gate participant signups and using 0x to generate orders to buy ZRX that were then filled by token sale participants, the team ensured that the tokens were equitably distributed across a large population and that the sale process itself wasn’t vulnerable to hacks or gaming. Since then, we’ve had numerous teams ask us for our code in order to run their own token sales and while we’ve been happy to provide one-off guidance and technical assistance, we’ve haven’t been able to prioritize re-writing and open sourcing this code for general use.

As more teams look to legitimize and issue tokens or other assets in the future, a service based on the 0x architecture to perform these types of sales could find a large number of clients. Of course, a free, open source version would also be great for the ecosystem!

Now That’s What I Call A Vibrant Community

13. 0WS

After a long period of development, many decentralized computation and storage projects are now out of beta and available for use. However, they still face the on-boarding and discovery problems endemic to many dApps. Using 0x to source liquidity and offer batch purchasing, a project could aggregate many of these services (Golem, Sia, Storj, RenderToken, eventually Filecoin) into a familiar interface that abstracts out many of the complexities of using and paying for these services. Imagine a daemon with a wallet filled with DAI that is able to automatically buy more usage tokens as server demand grows!

14. Software License Secondary Market

Software licenses are a notoriously opaque and illiquid market. Luckily, a few teams are working on tokenizing these licenses for easier, more transparent distribution and access. Imagine businesses being able to sell off licenses that they no longer need, or being able to loan a license to a friend if you don’t plan on using a piece of software for a while. Purchasing and managing these licenses will naturally require a much different interface than purchasing other commodity tokens, and could potentially be integrated into the software itself. This could eventually even morph into a service for offering initial sales of these licenses.

15. Fiat-to-Token

There’s no question that fiat on-ramps drive accessibility and growth for new currencies and protocols when added, which is why they’re at the top of the wishlist for many projects. However, building an on-ramp requires overcoming many regulatory and logistical hurdles, not least of which is sourcing liquidity for some low-velocity tokens. A relayer could reduce the dimensionality of this problem by just focusing on solving a USD-to-stable-coin (e.g. DAI) on-ramp. Once the fiat has been converted into a stable coin, the stable coin can easily be traded to the token of choice by tapping into the 0x networked liquidity pool and executing atomic batch fills for the desired token, reducing risk exposure on all parties.

16. Off-chain Auctions

While ERC-20 assets are fungible and develop efficient markets over time, many ERC-721 or Non-Fungible Tokens suffer from the issue of initial price discovery. No one knows how much every unique CryptoKitty should cost off-the-bat, thus requiring the use of an auction to help the crowd find out the market price of a Gen 12 Sluggish Gold Bobtail Cat. Unfortunately, these auctions usually occur on-chain, requiring participants to spend gas to bid (famously clogging up the Ethereum network) and requiring the auctioned asset to be held in escrow. Using 0x, orders can be programmatically generated off-chain to simulate a Dutch Auction or other auction system until one is finally taken by a buyer, decreasing the number of on-chain transactions.

A Dutch Dutch Auction

17. Bancor Mirror

Bancor takes a different approach to decentralized exchange by calculating a pre-set price curve and constantly adjusting pricing based on shifts in demand. This approach is novel and convenient, but has left it open to various exploits in the past. One could adapt this approach to 0x by pulling the pricing and availability of assets on Bancor, posting orders that correspond to these prices to a 0x orderbook, and waiting for someone to take an order. As an order is taken, simply front-run the fill with the corresponding Bancor order, ensuring the desired assets are there when the 0x fill lands. A more sophisticated approach might even involve a smart contract for filling orders that plugs into the 0x exchange contract, ensuring atomicity of these fills and not requiring the Bancor mirror to front-run. This approach could be a way to bootstrap initial liquidity for a 0x relayer while ensuring some initial revenue by adding a slight markup to Bancor orders.

18. DEX Lite

We’ve seen a number of relayers appear offering slick mobile native apps with integrated wallets + trading interfaces. While these relayers are well-positioned to be the mobile crypto hub for their users, they require a bit of commitment on behalf of their install base and there’s argument that a more general Ethereum wallet and browser that offers access to many trading interfaces could win larger marketshare in the long-run. A relayer that just focuses on being performant and usable for these mobile Ethereum browser users — perhaps in an experience similar to Google’s AMP or WeChat’s Mini Programs — can be dominant cross-browser and cross-platform. PinDuoDuo, a Chinese e-commerce company, similarly pursued a mobile-web-focused strategy to great success by riding on the massive distribution of existing platforms like WeChat.

(Bonus) In-App Exchange for NFTs

We expect to see ERC-721 assets explode this year the same way ERC-20 tokens did last year. We’re already seeing the first few NFT exchanges pop-up alongside more professional-looking NFT projects, but there’s still a fundamental disconnect. Many of these NFT projects want asset trading as a core feature of their dApp, but still send people to external exchanges to trade. Solutions like RareBit’s Express interface allow trading in-app, but we view these as just a first step. In order to allow these projects to monetize and facilitate real in-app trading, a relayer could offer ad-hoc exchanges-as-a-service that could be seamlessly embedded inside of dApps.