0x is “an open protocol for decentralized exchange on the Ethereum blockchain.” What this means is that anyone who wants to operate a decentralized exchange, can do so using the Ethereum smart contracts created by 0x.
0x protocol will act as a critical piece of infrastructure for the token economy, allowing Ethereum smart contracts to programmatically and seamlessly exchange Ethereum-based assets. In 0x protocol, orders are transported off-chain, massively reducing gas costs and eliminating blockchain bloat. These decentralized exchange operators are called Relayers. They help broadcast orders and have the option to collect a fee each time they facilitate a trade.
How does it work?
0x protocol works where : A “Creator” sends his request and at that same point the request is posted in an off-chain arrange/order book by the “Relayer”, next to which the request is acknowledged by the “Taker” by pushing the exchange into the task’s DEX smart contract. Thus, the 0x protocol uses off-chain order books, which is maintained by a relayer for settlement of trade between two parties. Relayers, being behind the maintenance and creation of these channels are incentivised by charging and collecting fees.
0x (ZRX) Token:
ZRX token is the unique aspect of 0x project which will be used to pay ‘relayers the trading fees by the users of the protocol. It is also a governance token in a decentralized form for the 0x protocol’s upgrade.