The 0x decentralized exchange protocol is gearing up for a major upgrade in what it terms ‘the most powerful protocol version ever released,’ v4.
In true DeFi fashion, the team has not just plowed ahead with the upgrade but put it to a governance vote. Between Jan. 16 and Jan. 23, ZRX token holders will be able to cast their votes.
0x Labs has started experimenting with a novel smart contract architecture for its public smart contracts which it aims to integrate into the new version. The improved design will facilitate DEX aggregation, enabling the sourcing of the best liquidity over a number of exchanges.
In July 2020, the team launched its own DEX called Matcha which improved upon existing platforms at the time and provided much-needed liquidity aggregation.
Improvements in Three Major Areas
0x Protocol v4 will usher in major improvements in three distinct areas, the blog post added. The most important being gas efficiency. There has been a lot of focus on optimizing the gas consumption of smart contracts while achieving a net improvement without sacrificing features;
“Compared to v3, 0x V4 improves RFQ gas costs by almost 70% (our simulations clocked 105k gas VS 320k on v3) and open orderbook gas cost by 10%.”
The post added that it’s cheaper to trade on both Uniswap and SushiSwap using 0x v4, thanks to an optimized Uniswap router. Gas prices are climbing again and the average is back over $10 according to BitInfoCharts.
DeFi functionality has also been improved in the new version which introduces the concept of ‘Transformers.’ These are customizable modules able to execute atomic operations on the traded assets such as token wrapping/unwrapping, or deposits/withdrawals from liquidity pool positions.
Automation of the protocol upgrade process has been included alongside ‘plug and play liquidity,’
“V4 allows custom on-chain liquidity pools to be plugged in via a standard interface and easily aggregated with all other liquidity sources.”
It’s very unlikely that there will be many votes against this upgrade.
ZRX Price Outlook
The protocol’s native token, ZRX, is not performing too well today having dumped 6% since the opening price of $0.463 on Jan 7. ZRX is currently trading at $0.43 according to Coingecko.
ZRX is still way down from its 2020 high of $0.73 in late August and is seemingly light-years away from its all-time high of $2.50 in January 2018.