Earlier this week our technology team hosted a session with Amir Bandeali, the co-founder of 0x, a project which has the potential to provide a critical piece of infrastructure for the token economy. Amir and our team discussed how the 0x protocol works and how it is benefiting the OAX project.
As you all know, we’re building a new type of decentralized exchange platform that gets over the shortcomings of current models. The decentralized exchanges that have already been developed have a number of issues in them, not least the limited trade volumes they can handle.
To get over this issue, and to power our decentralized exchange model with high trading liquidity, we’re applying the 0x protocol. This is an open, permissionless protocol which allows ERC20 tokens to be traded on the Ethereum blockchain. Here’s an analogy to explain how it works:
Assume that you’ve got something you want to sell. If you were just to ask around your friends on WhatsApp it might take a while to find a buyer, assuming one of your friends even wants your item in the first place. But if you were to post your offer on a public exchange platform, it would sell much more easily because of the maximized exposure it gains.
This is how smart OAX’s trading logic is — by letting someone broadcast their orders publicly on the Ethereum blockchain, the order is exposed to all the potential takers on the network, meaning the order gets filled quickly. This shared, on-chain and decentralized order book results in much higher market liquidity compared to a closed, centralized network.
At the OAX Foundation, we believe the time is right for the market to evolve from centralized exchange models to a decentralized exchange, free for all users to access and powered by the latest blockchain innovations like 0x. With the OAX project we’re creating a more orderly, transparent and efficient ecosystem for digital asset exchange.
The full article on Medium:
https://medium.com/@OAX_Foundation/how-the-oax-project-is-going-to-increase-liquidity-in-decentralized-token-exchange-cf9679945b12
Official site: www.oax.org
