Rumours are swirling in the cryptocurrency world over whether Coinbase will soon add the growing ZRX project, better known as the 0x protocol, to its expanding database of digital coins. The top trading platform for all things crypto, Coinbase has hinted at significant expansion in 2018 with the inclusion of new and growing currencies. Currently it trades the three main coins: Bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC). Industry insiders also predict that Ripple and Stellar will come to the platform soon. Could 0x be joining them?
What is the 0x protocol?
Blockchain technology is a method of creating decentralised transactions, essentially removing the middle man while allowing peer to peer transfers to take place. The most commonly seen activity on the blockchain so far has been the establishment and trading of ‘cryptocurrencies’: digital currencies which allow secure anonymous trading on an almost instant basis.
Cryptocurrencies have proven very popular with buyers, but there has traditionally been a trust issue between the coins and the market. Some crypto trading platforms have even attempted to bring back the middle man, in an effort to tighten up transaction controls.
Cryptocurrencies have been gaining prominence in recent months, largely driven by Bitcoin’s meteoric rise in 2017. Though you have no doubt heard of Bitcoin, and perhaps its near rivals Ethereum, Litecoin and Ripple, tokens such as ZRX are less well known. ZRX, or the 0x protocol, offers a solution to some of the issues outlined above. It aims to reduce transaction congestion and improve reliability, while operating within the decentralised exchange (DEX).
The 0x protocol is essentially a bridge between decentralised apps (dApps), and it enables links between digital currencies for the sake of trading. For example, 0x is compatible with Ethereum, one of the leading cryptocurrencies.
Coinbase supports its employees’ crypto endeavours
The founder of Litecoin, Charlie Lee, was once an employee of Coinbase. He served as a director of engineering at the exchange before branching out on his own, using his cryptocurrency knowledge to establish Litecoin. Coinbase was confident in Lee’s abilities to create a viable currency, and Litecoin was soon added to the exchange as a result.
The team behind the 0x protocol includes three former Coinbase employees: Fred Eshram, Olaf Carlson-Wee, and Linda Xie. Xie in particular has been very active in promoting the decentralised protocol and in selling its virtues. In a recent interview with CoinDesk, she outlined how the Bitcoin protocol underserves cryptocurrencies and how there is a gap in the market for a bridging block such as 0x.
Xie is working with Jordan Clifford (another Coinbase veteran) on investment project Scalar Capital, which is thought to have invested heavily in ZRX. She says that 0x should be bought and held with the aim of long term gains, and she sees the importance of emphasising market control, not centralised control, over cryptocurrencies. “If they’re going to be doing a decentralised governance system, the project founders or the coin creators themselves shouldn’t have a majority of these coins,” notes Xie.
With a strong team behind the 0x protocol, Coinbase can have confidence in its likely success. The backers and founders are skilled and knowledgeable in crypto legal compliance, in transaction facilitation and in understanding the market – making 0x one of the stronger emerging digital tokens. Less expensive coins tend to sell well as investors look to get early deals, and growing demand pushes prices up. The 0x protocol’s compatibility with other currencies makes it a strong contender for decentralised trading, and it could be an asset to the Coinbase exchange.
0x is a perfect fit with the GDAX Digital Asset Framework
Perhaps the biggest tick in the box for 0x, the protocol is one of the closest yet to the requirements of the GDAX framework. It promotes the following values: serving open financial markets, solving problems and creating value, offering economic freedom, and providing decentralisation. As Linda Xie herself notes, 0x fits perfectly with the GDAX framework and it would fit easily into existing exchanges as a result. Xie acted as an advisor to the creation of the framework, and is perfectly placed to understand its requirements and challenges.