0x Protocol Meaning

0x (pronounced “Zero X”) is an open-source protocol on Ethereum that standardizes how tokens are exchanged across decentralized applications. Rather than operating as a single exchange, 0x provides the underlying infrastructure that developers use to build decentralized exchanges (DEXs), trading interfaces, and marketplaces that can all tap into shared liquidity. In this sense, it functions as a connectivity and messaging layer for token trading, similar to how standardized networks support communication between traditional financial institutions.

Launched in 2016 by Will Warren and Amir Bandeali, 0x was designed to address fragmentation in early decentralized markets by introducing interoperable standards for token exchange. The protocol supports both fungible tokens (ERC-20) and non-fungible tokens (NFTs), allowing a wide range of assets to be traded through a common framework. Well-known applications such as Matcha, Coinbase Wallet, MetaMask, Phantom, Robinhood Wallet, and Zapper integrate 0x under the hood.

A defining feature of 0x is its hybrid execution model. Orders are created and relayed off-chain, while settlement occurs on-chain via Ethereum smart contracts.

Traders sign orders locally, including details such as token pair, quantity, price, and expiry time. These signed orders are then distributed by “relayers” - independent entities that maintain off-chain order books, facilitate order discovery, and charge fees for their services, without taking custody of user funds.

When a trader decides to fill an order, the actual token transfer is executed on-chain through 0x’s smart contracts. This approach preserves the security and finality guarantees of Ethereum while avoiding the cost and latency of broadcasting every order update directly to the blockchain.

As a result, 0x can aggregate liquidity from multiple sources and make it accessible through a unified, non-custodial interface. By separating order relay from settlement and providing a standardized protocol, 0x enables composable, interoperable trading infrastructure across Web3, supporting both retail users and institutional-grade applications.