Discovering value and imagining new use cases

Just want to create a thread to start a discussion with community on how to unlock value for all now that technology has been built and we can imagine use cases that nobody can even think of today. The team has done so much work and 0x is so powerful I think people do not realize. Matcha is a good example.

It is thus an open call for community to discuss:

1/ new uses cases and how people could leverage 0x to build applications on top of the network

2/ capturing value for all stakeholders involved across the board in creative new ways that would incentivize new behavior across the ecosystem

Any ideas or comments welcome.


I had a conversation with @mintcloud in person a while back and just recently over discord, but I let him share his ideas and @cryptohydrate also shared some ideas with me which he is free to share here, as well. hope we can have a wider more serious conversation than is possible through discord and that could potentially then also manifest into a ZEIP with community backing.

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I think there are mostly three things that we should all collectively address and explore to solve your point 2/ @Link .
This, it goes without saying, could be explored in addition to sustaining and grow 0x adoption (which is your point 1/). I think this is the single, most effective, vector to accrue value for this ecosystem, especially including ZRX tokenholders. In practice, any proposal should, in my opinion, always measured against its effects on 0x adoption. 0x operates in a 2 sided-market, so it’s fundamental that the two sides find value: best prices (end users) and profitable business opportunities (market makers, applications serving users).

Having said so, here are some thoughts around how to tackle 2/ from @Link list:

  • bring the governance of the protocol on an onchain-binding system. This should make all ZRX token holders even more empowered and accountable to grow and curate the protocol. 0x Labs will de facto (in the unstoppable code) be ‘just another team’ contributing to 0x protocol. Quoting from the long-term governance roadmap posted in 2020:

In 2021 we’re planning to work on maximizing the onchain portion of the governance system, reducing trust critical points in the deployment of upgrades. While this is subject to the completion of other roadmap items, we can start testing such a system for lower stakes changes that don’t require the deployment of new smart contracts.

  • Always in the same governance roadmap, we touched on the concept of Community Treasury. I think the time is ripe to test something out. We’ve kicked off a conversation here and I think there is room to test something meaningful, especially observing what is happening in other communities (Compound, Uniswap being the most similar imo).
  • expand the protocol fee model from Open Orderbook only to…something else. As a reminder, right now protocol fees are charged only on what is ~5% of total 0x volume. So, staking rewards are naturally limited, even if this epoch should be pretty sweet (over 100ETH collected so far!).
    We are where we are for good reasons: simply put, we haven’t found a convincing (both on paper AND implementable in smart contracts) model to capture value in the network without undermining 0x adoption of the remaining 95% volume. And what an adoption now! We’re in a very good spot. In 2021 we should go back to the drawing board and try to figure out how to solve the puzzle. The good news is that we’ve done this before :slight_smile:
    But I want to send the message that, especially given what I mentioned in the first bullet, I expect this to be a community effort. I think we at 0x Labs we can do a better job at being more upfront saying “we don’t know yet” instead of waiting to have all the answers before presenting something exciting that ‘works’. I will personally try to do it more often (like now). I hope this is appreciated and triggers a positive contribution on the other side!

@mintcloud thanks for your detailed answer and your suggestions. I hope we can discuss it further here and manifest it into something that could be integrated into the protocol through voices from the community. I like your ideas. I suppose my main point was to create an ongoing bridge between community and capital, so that all the different ideas from the community can be constructivelty channeled into making the protocol stronger and aligning incentives for all stakeholders.

It would be great to hear also from others that regularly contribute in the Discord. @nikita, sonofpegasus, etc and anyone from the core team.

Thanks for getting this conversation started @Link and @mintcloud!

Some thoughts on protocol adoption and value capture (see also: [temperature check] community treasury MVP thread)

It has become generally accepted that for a protocol to achieve adoption and accrue value, it must:

  1. Be useful
  2. Be able to capture value
  3. Have a defensible moat

The 0x protocol’s vision is to enable the peer-to-peer exchange of assets on the Ethereum blockchain. Assuming that #1 (above) is proven, the focus of this post is mostly on #2, which should in turn contribute to #3.

Up until now, peer-to-peer asset exchange has mostly consisted of speculative trading and, more recently, increasingly exotic defi protocols and applications designed mainly to deliver yield.

The potential exponential value that the 0x protocol can enable and capture is bigger than defi or any other discrete category of applications/protocols, because asset exchange is a fundamental primitive that underlies them all, both those that exist today and those that will be developed in the future. This idea is similar to the fat protocol thesis but is more directed towards intrinsic value than to dollar value.

The question at hand is how to accelerate and broaden the use of the 0x protocol to enable it to participate in that exponential value creation and capture? There are some obvious (admittedly maybe only in retrospect) ways to do this for existing use cases. For example, Matcha fills a market gap for a user-friendly trading application with highly-competitive pricing. Fee-less 0xAPI limit orders fill a market gap for people who want a guaranteed price with minimum fees.

However, outside of expanding integrations for existing use cases, the real near- and mid-term value capture will be determined by how quickly and effectively the protocol can expand and evolve to incorporate the new business models and crypto applications that will emerge and be enabled by the underlying primitives.

I won’t go into the details of what I think some of those might be here, because what I think is most important now is to create an efficient, transparent process for proposing, evaluating, and funding efforts to advance the protocol outside of the efforts of ZeroEx and 0x Labs. This capability can most effectively be jump-started through a community treasury administered within some initial authority and operating parameters.

Many other projects have already implemented community treasuries, so we have the opportunity to learn from them, particularly with regards to avoiding negative dynamics and outcomes.

For example, some initial things to consider include (not intended to be comprehensive or to apply in all models):

  1. Establishment authority
  2. Fund management and disbursement authority: direct (e.g., Uniswap model), representative council (e.g., Synthetix model), or a hybrid
  3. Compensation (if model other than direct)
  4. Period of service (if model other than direct)
  5. Source of ongoing funds and operating budget
  6. Investment themes and priorities
  7. Proposal process and format

As a long-time supporter of the 0x vision and mission, I personally am super excited to have the opportunity to participate in the project in a more substantive way and hope that moving forward with this idea will create many opportunities for others to do so as well.


These are great topics. We could take inspiration from what was proposed and implemented in Uniswap for their Grants Programs