 We are live. All right guys. We're back with another show We got a special show today because we got the zero X team over here Well one member right now the other one member is gonna appear sooner or later. He's running late right now But I will introduce them both regardless So the first one which you see in front of you right now is a mirror. Yes another mirror It's a duplicity over here to a mirrors is spelled with the I I with two E's Some years background is he's a full stack web application and smart contract dev And he has a former fixed income trader at DRW an online poker professional And he studied finance at the University of Illinois and our second guest which is not here yet The other co-founder of zero X is will Warren his background of smart contracts and R&D previously applied physics research and simulations at Los Alamos National Laboratory and Mechanical engineering at UC San Diego, and he's a PhD dropout. So we got some smart individuals on this call And so basically let's kind of like dive into it because I've been following your progression for zero X And it's actually one of my most exciting projects in the space currently For anybody that really doesn't know it Why don't we kind of do like a bird's-eye view in a 401 on the general spoke of what you're trying to build and how That's gonna look like Yeah, sure. Thank you for the intro of your great to be here really excited about what what block eeks is doing So zero X is a protocol for decentralized exchange on the theory and blockchain So the the token ecosystem is very rapidly evolving I think right now they're over 20 different tokens combined market caps probably around two and a half billion dollars and You see more and more popping up every day almost And in order for these tokens to be useful people are gonna need to be able to easily acquire them And then the end goal of these tokens is so that you could actually use them to work with different applications, right? So currently on the theory and blockchain the exchange ecosystem is sort of fragmented They're a handful of different decentralized exchanges They all use different smart contracts, you know, they have different learning curves different levels of optimization and All these different exchanges are sort of taking liquidity away from each other So in our mind There are huge network effects around liquidity when everybody is using the same underlying protocol Everyone is using the same settlement layer the same messaging format You could very easily trade across exchanges So that's kind of the problem. We're trying to attack liquidity problem decentralized exchange So if we're looking at a conspire comparisons right now if we look at I won't name names if we're looking at at a regular exchange at the moment and We're looking at zero X right now. Obviously everybody knows how regular exchange works, right? It's one center Control center you go in based on their rules you go out based on their rules They dictate all the all the rules for in and out. How would zero X look like from me as a user? So for you as a user Well, first of all, I guess I should explain. There's this concept of a relayer on zero X and that's any person or group that wants to host an order book And essentially act as an exchange So all of the orders are stored off chain on zero X and then they're settled on chain So it actually requires someone to you know do this service of hosting an order book So they're they're gonna be different relayers or exchanges popping up all using the same protocol and you would go to a relayer and Essentially just interact with it like a regular exchange You would need access to an Ethereum account somehow Don't either with like metamask or mist or the parody extension and Yeah, you could just trade directly from your own account. You don't need to deposit any money anywhere You're fully in control of your own funds at all times Every time a trade occurs That just happens on the blockchain You never have to trust any third party with your money Now for zero X are you guys implementing a fee at Gateway or right now is it only focus on crypto and tokens? so it's it's focused on tokens and and The way we see it Assets traditional financial assets are going to become tokenized. It's only a matter of time I know they're already a handful of different groups working on tokenizing fiat Yeah, I mean some are already live right and they're just maybe not used that frequently But but I think things like stocks bonds You know that'll all become tokenized at some point also rare scarce digital assets like video game items or You know memes stuff like that all of those can be traded on zero X and obviously at points protocol tokens are sort of our Our main target we really Aimed to to be able to provide liquidity to other decentralized applications. They're building on top of zero X So does this solve the problem? Let's say like for example if we look at South Latin America Or if we look at certain places in Africa or even some places in Asia, they don't really have access to current exchanges Do you even buy cryptocurrency? Does this can this solve that problem for accessibility for the people that don't have it? I would say not really know you still have to go through the traditional on-ramps or off-ramps to cryptocurrencies and That's a harder problem to decentralized But I know their groups working on that as well our main focus is No, once you have cryptocurrency already being able to exchange it with whatever you need to interact with other applications so, you know right now An application built on a theorem might require one token to be able to to be used But in the future as apps get more and more complex You might need ten tokens to interact with an application and that's just a terrible user experience And you need to be able to get those in a seamless way So when I use zero X because I just want to run it through my my mind I'm pretending. I'm using it. So when I use zero X and can we'll be able to use on the phone or is this just on like on on a desktop So it's just an open system of smart contracts. Okay, how you interact with it is No, it's up to you. Okay, so let's say let's say I'm using on my computer and I'm logged in right now In zero X do I get then a personalized zero X address? And is that address hold or how am I interacting with it? so You just have your regular the theorem address, you know might hold either might hold tokens And then you could create an order off chain So you just need to sign it with your private key. It doesn't cost gas or anything And then when someone wants to actually fill an order They take that and they inject it into the smart contract and then the actual transfer of assets will happen Also, if you are a DAP developer You can write solidity code that you know essentially plugged into Zero X for example, you could have a Dow Or like you you vote on which orders to fill or something like that. So if I understand this correctly and Correct me if I'm wrong. So it's almost like you get the marketplace. I Can go use it with my own Ethereum address and I can put up an order of saying I want to sell I don't know Ethereum for X. I'm on a price I put up that sell order on zero X and I still have it in my own personal wallet, right? It's not costing gas and the only time it's actually executed into a smart contract is when someone says yes, I want to buy it Yes, okay So zero X itself for you guys since you guys are creating a token as a utility within it How does what's the function of that in that process? So By the way, we'll we'll just got here if you want to join in to Before I answer this question sure. Yeah You still hear me already. Yeah, you guys are perfect There we go, we got second second founder here You're just asked about the purpose of our token. So there's two purposes So first of all something I haven't explained yet relayers can charge fees for providing a service of hosting an order book and All the fees are denominated in zero X tokens Relayers get to keep 100% of the fees that they charge. It's not like the protocol Extracts any rent or anything, you know, we don't get fees from people using the protocol So that's that's use case one to incentivize relayers to host order books And use case two is for decentralized governance. So sort of as I mentioned earlier I think the ecosystem is sort of fractured right now and it's it's really hard to trade across different exchanges and We aim to solve this problem through decentralized governance if everyone is using compatible versions of smart contracts You could maintain that network effect and have sort of a global liquidity pool But yeah, it requires governance to to make sure that you know Everyone is using the same protocol Otherwise, you know If you launch a new version of the protocol, someone decides to stay on the old one ends up getting fractured and you kind of Just end up in the same place we are today right Actually, I just found this term yesterday. I've been I've been looking at the literature the term academic term for this This network effect that's created when like can competitors are building on top of this the same standard is called They're called complimentary networks. So if there's two different decentralized exchanges They might even be competitors if they're both building on top of the same infrastructure They can provide mutual benefits for each other because there's there's sort of a disability to arbitrage across The different exchanges the different order books and it ends up producing a mutual benefit for both of them So it's actually better to have a competitor if that's if that competitor is using the same standard as you are It's better to have that situation than to not have a competitor at all and then you just single liquidity Interesting. Can we rewind a little bit? I want to dive in a little bit deeper for the host Can we explain that a little bit more detail like you as a relay a relay or in your hosting? How does that look like or how does that look like? Sure, so the protocol is It's completely agnostic to the different strategies that relays might use so since All these orders are completely off-chain The way in which you communicate that to the end user doesn't matter at all It could be over Twitter, Facebook, email, WeChat, whatever. I would say the Easiest and probably initially most common way to host an order book would just be storing these order messages in a database and organizing them and just Presenting to that to the end user in the form of an order book But you could also have different strategies For example, you could have a dark pool offer a shapeshift type service You could use a centralized matching engine These are all things that you could do in Zeroaxe and they all have slight advantages and disadvantages right so One analogy one analogy that could be somewhat Relevant is like Craigslist You know if you know someone on your email contacts that wants to buy your old bike you can send them an email and You know, hopefully they want to buy your bike, but maybe they don't but if you want to broadcast this offer to the entire world of people that are interested in old bikes you go on Craigslist and You post your offer and everyone in the world is interested in old bikes sees that offer and if they are interested they contact you In Zeroaxe just seeing that offer is enough for them to actually execute a trade with you Because of that offer in that packet of data that represents your word It contains all the information needed for the smart contract smart contract to actually carry out a trade between The person that originated the order and the person that decided to take the other side of it so relayers are essentially just Groups that decide to host these websites much like Craigslist and People can post their orders there and they can charge transaction fees to do that to offer that service and You know, it it's from an analogy standpoint This is an okay explanation But like from an end user perspective It might look and feel exactly the same as like using G-DACs or using coloniacs like they don't under They don't necessarily see or care that what's going on under the surface is this protocol You know, yeah, so correct me if I'm wrong, but earlier you said that When when I when I place an order in I still have the tokens in my own personal wallet, correct? Yes, so when my tokens are sold For whatever I'm selling you for and what I receive does that go back into my personal wallet? Yes, okay Yeah, so The way that works is you would provide an allowance For our the 0x smart contracts to access your tokens essentially And it just pulls them out of your account And pulls someone else's tokens into your account when a trade occurs, right? And the reason why you're comfortable providing this Particular smart contract with access to your funds is because the code is completely open source You can look through it. You can audit it, you know exactly what it's So you know that this smart contract is not going to be touching your funds in any way Unless you provide explicit permission by generating an order that is signed with your crypto group, you know, it's signed with your private key So can we do a little bit deeper dive on the tokenization I know you just touched on earlier, but I want to see how it how it fits into the overall ecosystem of 0x So Can we touch on that? Can we actually can you like go through like the birds I view of of how the 0x token will be Facilitated in the whole ecosystem. Oh, yeah, absolutely. Yeah, so I Think the most important part is the governance So we're complete we're we're building this completely Unopinionated piece of public infrastructure that anyone can go and build on top of and if people if we expect people to Build these profitable businesses these decentralized exchanges on top of 0x They need to be able to have a say in how that infrastructure is upgraded over time you know, it wouldn't make any sense for someone to go and build a Profitable business it takes a lot of time and effort. It's expensive It wouldn't make sense for them to commit all of that to building on top of 0x if Some like one single person or group could just go and decide to change the protocol in a way that completely destroys their business or Requires them to completely rebuild So there needs to be a governance process and how all of these different Applications built on top of 0x can, you know Oversee the upgrade process Does that make sense? Yeah, it does. Yeah, and and we have structured So that big players in protocol, you know, big traders Big relays or big dapps that use 0x will end up having a larger say in governance because They probably have more tokens. Yeah, they naturally accumulate tokens over so this is kind of kind of similar to like if you Ran a proof of stake where if you're staking X amount of tokens, you have a little bit more power and say within the network as a node right Yeah, so that that's like a critical piece like I don't think you could really expect to build a future proof System that has a bunch of stuff built on top of it if you weren't able to sort of smoothly transition to Improved versions of the protocol over time. I like it is just like a critical piece of the whole system the second The second use for the token is for incentivizing relayers to host and maintain these off-chain order books and what's really interesting about Token-based business models is that anyone that wants to go and build a decentralized exchange and Therefore increase the utility of 0x protocol and its token can purchase a bunch of tokens and then they can go commit a bunch of time and effort to building a useful application a decentralized exchange on top of 0x and They can directly influence the utility and therefore the value of the token. So they have an information edge Now, I think it's kind of this is like a new concept So like imagine if you were developing an iOS app And you went and bought a bunch of Apple stock before you released your iOS app to the public Probably wouldn't really matter. Okay, like no one really cares about your iOS app You know Apple's worth billy many many billions of dollars It's not you know your iOS app probably isn't very critical to the utility of iOS as a platform but when we're talking about these open protocols that are very tiny and They have tokens and the value of these tokens is directly proportional to the utility of the protocol You have a massive information edge if you decide to go and build on top of that protocol And so that's kind of that's this idea of like bootstrapping a network that like Fred or some talks about this on in his medium articles and it's It's like a really interesting concept that I don't know if I don't know if we've really seen something like this possible before tokens So what's your guys roadmap right now currently? So I know you guys have a launch coming up soon Maybe next half a year or under but what's your general roadmap within next year or so? so There there are a couple tools that we want to build out initially I Guess one of our main areas of focus will be the governance aspect So initially our contracts will be using a time-locked multi-sig which makes it Completely secure even if we wanted to you know attack it But governance is still a big area of research and there a lot of different projects working on it Our focus currently is to launch a functional exchange Protocol at the time that we we launch our token So yeah, we're getting to that point first then focusing on governance some other tools that We're considering building are like a trade explorer for example like the ether scan of 0x They're going to be essentially three different areas of focus For us so user tools developer tools and then R&D Trade Explorer as an example of a user tool is for developer tools We're building a JavaScript library 0x.js Which will make it really easy for people to interact with a protocol without you know having to deal with the smart contracts directly It'll allow people to easily set up relayers we might release pre-configured databases things like that to Make it a lot easier for relays to operate R&D Privacy is something that's really important There are a bunch of optimizations that can be made Especially if orders are private phase two So there's something we don't talk about very much because it it can be distracting from the primary Utility offered by the protocol But phase two is we want to build a fully decentralized Order book so instead of having an order book that's stored in a centralized database and owned by a single entity we want to spread that word book over a peer-to-peer network that's sensor resistant and Anyone that is participating in that network by propagating the order book and hosting will earn a Will earn a steady flow of tokens and that flow is proportional to their contribution to the network But that is like an entirely different Undertaking that will require, you know serious research It sounds ambitious it's almost like you want to piggyback off like tour or something. It's fascinating Yeah, we wanted the central, you know, I don't get rid of all the centralized points of failure So what can you give us a closer estimation on when your launch is? Yeah, so we're gonna be launching early Q4. Okay, right now. You so our smart contracts are Fully functional you can go and interact with them right now on covon Zero X OTC, which is that zero X project comm slash OTC and like it works. It's fully functional We've done a ton of testing We're going through security audits right now and immediately after our contracts are, you know We're positive that they're safe and secure We're gonna deploy them to the a theory and main net and that's gonna happen in a matter of weeks And after we deploy the main net, we're gonna go and use your X protocol to deploy our token Awesome, so we'll wrap it up like we'll wrap it up with that I just first want to thank you guys for coming on on the show Is there any final any last final words you want to tell our audience? Thank you for your attention. Yeah Awesome, so what's the best resource if they want to find out or if you want to follow zero X? What's your website? What's your Twitter? So our website is zero X project comm If you're a developer definitely check out our github Twitter is zero X project and our slack we're very active on our slack Which is zero X project dot slack.com. Awesome. Well, thank you guys Thank you