The interoperability protocol seeks to expand beyond the Ethereum and create a cross-chain functionality.
In a blog post on Friday, 0x Labs‘ product manager, Theo Gonella, presented the protocol’s ambitious plans to steer development towards a promising, if technically challenging, no-permit exchange: connecting the growing constellation of viable layer 1 blockchain platforms seamlessly.
The Ethereum-based protocol is designed to be a set of interoperability tools for decentralised exchanges of all kinds, having great success this year in connecting a network of more than 30 projects being built with its API.
Throughout 2020, as decentralised finance (DeFi) grew, so did 0x use: the protocol facilitated almost USD 4 billion in transactions between DEX and aggregators such as Tokenlon and 1inch, and generated almost USD 400,000 in protocol fees, according to 0xTracker.
Similarly, 0x’s native token, ZRX, experienced a 280% rebound from USD .259 to USD .73, before a 50% drop in the middle of the entire DeFi market.
However, going forward, 0x now plans to take its vision of inter-chain, or cross-chain, interoperability forward.
„While Bitcoin Supreme Scam is the platform where most of the tokenised value has emerged in recent years, we believe we are heading towards a world of multiple blockchains with a vast network of interconnected websites forming the backbone for the web3,“ wrote Gonella. „Given our vision of the 0x protocol as an open technical standard for p2p exchange, it is natural that the standard will expand to new ecosystems as they emerge.“
The publication presented the growth signals that Ethereum’s competing networks would need to exhibit in order for 0x to devote development resources, including unique digital assets, strong developer communities, and a deep end user group.
However, Gonella also recognised that cross-chain functionality and composability is a notoriously difficult issue.
Issues include the portability of assets wrapped in different standards across chains, the opportunity cost for users to lock their tokens into cross-chain bridges, and the updates required to the 0x infrastructure and token economic model, including rethinking and governance.
Despite the complexity of the task, Gonella adopted an optimistic tone:
„We are seeing a Cambrian explosion of innovation and creativity, and it is only just beginning.