0x Looks Toward Cross-Chain Asset Exchange And Liquidity Aggregation

0x looks toward cross-chain asset exchange and liquidity aggregation. In a blog post on Friday, Theo Gonella, 0x Labs product manager, outlined the ambitious plans of the protocol to guide growth towards a promising, if technically challenging, horizon for permissionless exchange: seamlessly connecting the growing constellation of viable layer-1 blockchain platforms.

This year, the Ethereum-based protocol, intended to be an interoperability toolkit for decentralised exchanges of all stripes, has seen considerable progress in linking their API with a network 30 + projects developing.

As Decentralized Finance (DeFi) boomed during 2020, so did 0x’s use: the protocol facilitated almost $4 billion in trades through dexes and aggregators such as Tokenlon and 1inch, and, according to the 0xTracker, generated nearly $400,000 in protocol fees. Similarly, 0x ‘s native token, $ZRX, saw a 280 percent rally from $.259 to $.73, before a 50 percent decline in the broader rout of the DeFi sector.

As it looks to the future, however, 0x now plans to bring its vision of interoperability cross-chain. “While Ethereum is the platform on which most tokenized value has emerged in the past years, we believe we are heading towards a multi-blockchain world with a vast web of interconnected networks forming the backbone of web3,” wrote Gonella. “Given our vision for 0x protocol as an open technical standard for p2p exchange, it is natural that the standard expand into new ecosystems as they emerge.”

The post laid out signs of growth Ethereum competitor chains would have to exhibit in order for 0x to devote developmental resources, including unique digital assets, robust developer communities, and a deep pool of end users.

Gonella also acknowledged that cross-chain functionality and composability is a notoriously difficult problem, however. Issues include porting wrapped assets of different standards across chains, opportunity cost for users who lock their tokens into cross-chain bridges, and necessary updates to the 0x infrastructure and tokeneconomic model, including staking and governance.

Despite the complexity of the task, Gonella struck an optimistic tone “We’re seeing a Cambrian explosion of innovation and creativity, and it’s only just getting started.”

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