Web3 needs common standards to succeed – which is why 0x is building a trusted exchange infrastructure to allow tokenized value to flow across all blockchains.
Web3 heralds the next phase of the Internet, where value will be controlled by users rather than middlemen.
But to achieve this, it is necessary to establish decentralization in the design from scratch.
While the traditional for-profit platform business model initially provides a lot of value to users, the net effect is to lock users into the platform in order to extract as much value as possible.
The future of trust is directly related to the end of centralization – and this must be developed on both open and permissionless platforms.
0x is a project with this concept firmly in mind, and its open source, decentralized exchange protocol was created by 0xLabs to become the global pillar of decentralized exchange. Starting with Ethereum, it now allows peer-to-peer trading of tokenized assets on a growing number of blockchains, including Polygon, BNB Chain, Avalanche, and Fantom.
0x was one of the first projects to emphasize the importance of decentralized governance in its design. "0x is an open, secure, and adaptable exchange infrastructure that opens up the global pipeline to the tokenized economy," Brent Oshiro, CX and communications director at 0x, told Decrypt. "Having a common standard for a decentralized exchange makes it easier for developers and businesses to build applications that allow web3, allowing tokenized value to flow and scale across different blockchains."
Standard bearer
If the concept sounds familiar, it's because it's the same logic as the current Internet architecture. The network works because no one owns it and developers build it using agreed standards. Oshiro explains, "Without these shared standards, you would have a completely different, disconnected Internet."
You no longer need AOL or CompuServe's CD-ROM to access the "walled garden" version of the internet. People can use different email clients (gmail, Outlook, Yahoo) to send messages to each other because simple mail transfer protocol (SMTP) can transfer email across networks.
Images, text, video, and other multimedia move seamlessly across the web because we all agree that Hypertext Transfer Protocol (HTTP) is the universal language between servers and browsers. It was it that formed the basis of the Internet as we know it today.
But that's Web 2.0. What does it have to do with the next iteration of the Internet? Everything related.
New networks, new standards
"The Internet went from initial information sharing to revolutionizing everything we did — creating trillions of dollars in economic value in the process," Oshiro said. But these trillions of dollars in revenue are largely captured by centralized gatekeepers and middlemen.
Web3 promises to redirect economic value to individuals involved in the ecosystem; But in order to do that, it needs a whole new set of rules to support value exchange. A decentralized internet requires a layer of connectivity or public standards that allow value to flow between blockchains, just like HTTP on the web today.
"Decentralized governance is the ultimate utility of creating the next generation of the Internet."
-Brent Oshiro
In 20 years, everything that can be tokenized, from stocks and bonds to airline miles and video game ownership, could be tokenized, but it wouldn't have happened without a "non-profit company-controlled unbiased protocol," said Will Warren, co-founder and CEO of 0x Labs.
The current internet runs on a centrally managed infrastructure, while Web3 will be controlled by users. "Decentralized governance is the ultimate utility of creating the next generation of the Internet — in the process, users shape the evolution of the Internet and share in the value created," Oshiro said.
Image source: 0xpo 2020
Trust the process
0x is one of the few cryptocurrency projects that uses credible neutrality as a guiding principle for developing new internet infrastructure.
It spends its money on the cutting edge.
For example, when 0x Labs launched its liquidity aggregator API offering on polygon and Celo blockchains last year, the two projects allocated a total of $10 million in MATIC and Celo tokens to fund 0x-powered applications built on their respective blockchains. Instead of putting the money into its own consumer-facing DEX aggregator product, Mattcha, 0x Labs allocated the money to a community vault to support the numerous businesses building in the 0x ecosystem.
"We put the integrator ecosystem first because if they succeed, we all succeed."
-Will Warren
"We want to give communities the power to decide the best course of action," Warren said. "We put the integrator ecosystem first because if they succeed, we all succeed. The protocol we're building needs to work for everyone who builds it. ”
Community Garden
That's why governance becomes increasingly valuable as ecosystems evolve.
Oshiro told Decrypt that it was a virtuous circle. As 0x usage increases, the protocol becomes the base layer for Web3 for tokenized value exchange. This, in turn, has driven the adoption of 0x-based integrators, creating more economic value for themselves and users – ultimately bringing the trillions of dollars of economic value that the Internet has already created to the next generation of decentralized Internet users. Because the infrastructure 0x is building will create tremendous value across all integrated chains (not just Ethereum), ZRX token holders have unprecedented influence through collective governance of infrastructure designed to become the backbone of Web 3.0.
Building an exchange infrastructure on top of a rapidly evolving blockchain means that the 0x protocol will need to be constantly adapted and improved. Since its launch, 0x has been gradually handing over all decision-making power over infrastructure upgrades and vault management to its token holders.
"The ability to upgrade comes with tremendous momentum and a lot of downstream external factors," Warren said. "So the only people who can update the infrastructure are the stakeholders and the people who build businesses on it, and that's what we think."
20/22
Most retail consumers don't know who is running/owning the infrastructure for 90% of their activity.
The same thing will happen in the cryptocurrency space.
Most users will exchange with their preferred wallet, and 0x will only silently execute transactions in the background.
- Adam Cochran(adamscochran.eth) (@adamscochran) December 20, 2021
The ultimate goal, of course, is to create a seamless experience for Web3 users. Adam Cochra, a partner at Cinneamhain, said in a recent tweet that just as most retail consumers don't know what's happening at the Internet Protocol level, so will Web3: "Most users will exchange with their preferred wallet, and 0x will only silently execute transactions in the background."