0x Launch Kit – Launch your own cryptocurrency exchange or marketplace

by tomhschmidt • 7 years ago

387 125 7 years ago

Tom from 0x here. Happy to answer any questions about Launch Kit or 0x more broadly!

v643• 7 years ago

Been following the 0x project for a while, just want to say this is an amazing project that demonstrates the power and potential of smart contracts and decentralized finance. Keep up the good work!

bananocurrency• 7 years ago

Is there a bug bounty on this?

tomhschmidt8• 7 years ago

There's a bounty on the 0x smart contracts, but not on this sample exchange codebase https://blog.0xproject.com/the-0x-v2-bug-bounty-f8981f322dd7

blunte• 7 years ago

The real bug bounty is for someone to exercise a flaw and steal from others :/.

A dapp of any sufficient complexity will have bugs, some of which can probably be exercised to steal funds.

flyGuyOnTheSly2• 7 years ago

How do you overcome the inevitable "I don't trust an exchange that was launched within minutes by an amateur" stigma?

tomhschmidt8• 7 years ago

You don't have to trust! 0x Exchanges are non-custodial -- you hold onto your funds and atomically execute trades through the 0x smart contracts, which are open source and audited.

https://www.youtube.com/watch?v=WSxphhWcLxk

turtlecloud• 7 years ago

how will you guys compete against binance?

dmos62• 7 years ago

Hi Tom!

After reading the Why page, I still don't have a concrete notion of what this is. So I'll jab a few questions that might help me make some sense:

First question is about decentralization. What is off-chain relay in this case? Is that a centralized part of the system? Are there centralized parts of the system?

Can this be used to implement more robust margin trading? To my knowledge, only centralized exchanges/brokers currently exist for margin trading.

What settlement speeds can be expected?

That's it for the questions. I don't want to retract from them, but I'll mention that the site doesn't work well with Dark Reader: all theme generation modes, except static, render most of the text invisible.

tomhschmidt8• 7 years ago

Great questions!

First question is about decentralization. What is off-chain relay in this case? Is that a centralized part of the system? Are there centralized parts of the system?

Off-chain relay is how parties find each other facilitate a trade. As a maker, I can create an order off-chain, but I still need to find a relevant taker who is interested in filling the order by sending it to the 0x smart contracts on-chain. Relayers pool together these off-chain orders and serve them up through a website, so that it's easy to find people to trade with. Note that this process is optional -- you can still trade peer-to-peer if I send you the order over email, SMS, etc. While relaying is centralized, relayers are non-custodial, so your funds are never at risk. We also have plans to make some parts of relaying less centralized in the future through 0x Mesh: https://blog.0xproject.com/0x-roadmap-2019-part-3-networked-...

Can this be used to implement more robust margin trading?

As for margin trading, yes, you can trade dY/dX tokens on 0x relayers, or combine 0x orders with any on-chain lending protocol such as Dharma or MakerDAO to get leverage.

What settlement speeds can be expected?

All trades currently settle on-chain, so the Ethereum block time is our bottleneck. Look for some updates on this near future :)

stcredzero2• 7 years ago

Could I use this to launch an exchange for crypto derivatives?

feuGene• 7 years ago

Sure. If you create an Ethereum-compatible token that represents the crypto derivative you have in mind, then you can indeed use this to launch an exchange for that token.

johnmarcus• 7 years ago

I think i see what you are doing here while others are missing the point. If there is an open source ui, there is an open source api as well. My do-something-usefull-for-users app isn't going to launch a full exchange - but what I would implement is the api library allowing a user to exchange utility and $$ tokens from one to another while staying in my app.

ergo, the user benefit here is that the user only needs a Coinbase or like account to transfer dollars to tokens, and then the user can obtain other tokens within any particular app. The user doesn't need to sign up to yet-another-exchange-with-my-personal-data-and-who-are-these-people-anyway-and-do-they-have-the-tokens-i-use-etc,etc. Now the user can readily take tokens not in use on one platform and transfer them to a token of another platform, all without leaving the platform specific application. That's a big win for the ecosystem.

I can see why you built the slick ui to demo your product, i think it's the right move because i can use it without a single line of code. I think the next challenge you will have is getting developers to adopt an underlying api client library. If I understand what you are doing correctly, perhaps build that client library in js to be used in react and a demo app that has reduced exchange funcationality for quickly swapping two tokens. it should look as simple as the interface for sending tokens to someone now.

If I guessed all that right, the company i work for may be willing to be an early adaptor. Let me know. We certainly aren't going to build yet-another-exchange, but i think empowering a transfer of btc/eth/eos/xrp -> myLittleUtilityToken within app would be very powerful.

tomhschmidt8• 7 years ago

Hi John -- sounds like you might be interested in 0x Instant, which lets you offer one-click token-to-token swapping on your website or inside your app. https://0x.org/instant

rando444• 7 years ago

This question is open to anyone:

I'm extremely curious what the business model here is.

Who is paying for this to be created, and what do they get out of it in the long run?

gregorymichael• 7 years ago

Site looks great. Nice design.

detritus• 7 years ago

I'd perhaps add something like 'crypto' to the headline - I thought this was a marketplace for physical items, somehow - like a local goods exchange.

jldevops• 7 years ago

Agreed, just a small change, otherwise awesome to see something like this out there.

Just curious, does anyone know of a kit like this for digital marketplaces for goods or services (not crypto)?

stcredzero2• 7 years ago

Right. I thought this was for building an exchange for goods in general. That's what I thought was awesome.

joshfraser• 7 years ago

Yes! At Origin we built a Marketplace creator that allows you to create a decentralized marketplace for buying and selling anything in a matter of minutes.

https:/www.originprotocol.com/creator

sctb• 7 years ago

OK, added. Thanks! We could also try “token”, which seems more precise in context although more ambiguous on its own.

dstick• 7 years ago

Is it pronounced “ox”, “zerox” or “zero x”? :)

CyrusL• 7 years ago

We pronounce 0x as “zero-ex,” but you are free to pronounce it however you please. https://0x.org/faq

tomhschmidt8• 7 years ago

We call it "Zero Ex"!

duncan-donuts• 7 years ago

In the disclaimer it lists a company as ZeroEx Intl, so I’d guess the last example

steveharman• 7 years ago

Does the planet _really_ need any more crypto exchanges?

Hardly a week goes by without a couple of new ones starting. Surely we must have more than enough by now?

jandrese• 7 years ago

Hardly a week goes by without one folding due to hacking, mismanagement, or outright criminal activity. Seems like they need someone to keep up the churn or they might run low.

Quekid5• 7 years ago

So, no. The answer is no.

EDIT: it's absurd that people continue to fall for this nonsense, but here we are, I guess.

woah• 7 years ago

You can’t steal the tokens if you are running a 0x exchange.

jMyles• 7 years ago

Well, what's currently your favorite decentralized exchange, prior to 0x?

What do you suggest for people who live in regions where this technology is banned or where the difficulties of connecting orthodox bank accounts, etc, make access impossible?

The last decentralized exchange I knew about was EtherDelta, and 0x seems to be an improvement.

kissickas2• 7 years ago

IDEX has been the #1 DAPP on Ethereum since March 2018[0]. It's also the #1 DAPP by users and transaction count.

You can't buy crypto with fiat there, though, so connecting your orthodox bank accounts is irrelevant in this case. The founder said yesterday in an interview [1] that they may work with partners to enable this eventually, but so far I don't know any good decentralized exchanges that offer that. Buying crypto on a decentralized exchange with your bank account seems pointless to me - either buy it in cash or buy it on a safe platform (and then get it out immediately so they can't exit scam you or get hacked with your money).

[0] https://twitter.com/idexio/status/969609728329469952

[1] https://www.youtube.com/watch?v=60rvPilAmDk

throwaway2016a• 7 years ago

This looks great but I'm not sure if the title is accurate. For most of the world the barrier to running an exchange is four fold:

1. Technology

2. Regulatory

3. Trust

4. Critical mass

This looks like it only address 1. Which is certainly a big hurdle but I would have loved to seen something explaining how to get 2 - 4 done.

From some of the answers bellow:

You don't have to trust! 0x Exchanges are non-custodial

That's great. There should be a writeup on that front and center of the how and why.

leoplct• 7 years ago

Why should I launch an exchange when there are already hundreds of existing exchange?

As a entrepreneur: Exchange services is very difficult to differentiate. It’s a commodity service. Why should I invest in marketing to promote my new exchange?

As a customer: Why should I buy tokens? - Most of existing tokens have not active project behind - Many times the token is useless for the project and it will not increase in value if project succeed (just see ZRX token. It’s down -76% from 52wk high while your team is working actively on the project. Why investors have to buy tokens?

tomhschmidt8• 7 years ago

If you want to list the same assets as everyone else with the same interface in the same markets, then yes, it's hard to compete. However, we see a world of tokenized assets coming online that will need unique markets for exchange. Something like Radar Relay (https://radarrelay.com/ for ERC-20 commodities) is totally different from Veil (https://veil.co/ for prediction market shares) is totally different from BoxSwap (https://boxswap.io/ for trading collectibles). Even within ERC-20 commodities exchange, there are many different models of exchange within different markets that are sufficiently differentiated.

We think of 0x more like Stripe: an under-the-hood technology that allows entrepreneurs to move more quickly and easily add exchange to their product. The concept of "tokens" and "exchange" will become very abstract in the near future.

toomuchtodo• 7 years ago

We think of 0x more like Stripe: an under-the-hood technology that allows entrepreneurs to move more quickly and easily add exchange to their product.

One’s velocity should always be slightly less than their SEC defense attorney. If you're legit, take the time to make sure your paperwork is legit.

https://news.ycombinator.com/item?id=18185701 (Top comment by Animats should draw your attention)

hrdwdmrbl• 7 years ago

Not that I have any interest in launching an exchange, but I do see what you mean by the possibility of an exchange becoming quite abstract. If housing deeds are traded then a housing marketplace is an exchange. If cars ownership is traded then a car marketplace is an exchange. If in-game items are traded, it's an exchange.

Could one think of stores as one-sided exchanges, where resale is just not natively possible? Does Google operate an ad exchange? Is iTunes an exchange? If digital goods ownership were on a blockchain then resale would be possible... What about physical goods?

aakilfernandes• 7 years ago

Different jurisdictions have different compliance requirements. Not sure, but my guess is the goal of this project is to allow regulatory arbitrage with a single unified interface.

Legogris7• 7 years ago

Capabilities to enforce regulatory compliance on permissionless chains is coming. You could, say, have zero-knowledge proofs in smart contracts that enforce that tokens representing security X can only be transferred if the receiving account has performed KYC and confirmed as an accredited investor in jurisdiction X, Y or Z, without leaking any PIIs that went Intl the verification.

Or more trivially, TPL for account tagging.

Microsoft's initiative on decentralized identity leveraging on the Bitcoin blockchains could be a component in this. Excellent podcast episode here: https://letstalkbitcoin.com/blog/post/what-bitcoin-did-107-m...

Not to say you're completely wrong, just that smart contracts can be used to enforce regulation rather than skirt it - like any tool the outcome depends on the intentions of the one wielding it. :)

jamespitts2• 7 years ago

Answering why is up to you, the builder; differentiation is key to why 0x has created this protocol.

"Tokens" can be a special kind of object which can be "exchanged" for other kinds of objects. It is not always about purchasing or swapping; this interaction can solve many different kinds of coordination problems.

The exchange can create a context around users interacting via various types of tokens, enabling new kinds of services and communities to form. This could lead to enormous value for users.

arcticbull6• 7 years ago

This could lead to enormous value for users.

In what way? I think that was the parent poster's question. I think it's fair if we're going to be making huge broad-strokes claims we should at least attempt to justify them.

Nursie• 7 years ago

> Why should I launch an exchange when there are already hundreds of existing exchange?

Maybe you have the on-off ramps sorted out, a friendly bank and a regulatory environment, licenses, legitimate AML/KYC measures and can do it properly?

While there are many exchanges already, how many can say they're that above board?

rib3ye• 7 years ago

Think more broadly about what an "exchange" could be. You're thinking crypto forex, but consider a crypto-kitty bidding platform or a virtual game item marketplace.

Legogris7• 7 years ago

Or market for insurance policies. Or bonds. Or stocks. Regulation is clearing up and there are many biting at the bit for this. The disruption of financial markets may not happen tomorrow, but once it does it will go fast in each market. If there are more efficient venues, competitive market participants will start moving once they realize that they will be at a competitive disadvantage if they don't. When I say efficiency, I am not talking in technical terms and not necessarily on the kind of environments we see on public permissionless chains. So let's keep transaction finality and computational efficiency out of scope for a moment.

Think of chains as subnets on the internet. The gaps will be bridged to allow seamless transfers between them.

I've been wrong before but to me this is bound to happen. How many businesses in competitive areas have fax as a preferred method of communication today?

Don't take what I'm saying as an argument in favor of buying ZRX tokens. I do think it's a cool project, albeit IMO could have done better without the utility token as an inherent component. But that's more about the business model than the tech. It will probably be another boom and bust before we see the leading protocols emerging.

banachtarski2• 7 years ago

I'm thinking a database.

Animats• 7 years ago

Why should I launch an exchange when there are already hundreds of existing exchange?

Because you can steal the assets, like about half of Bitcoin exchanges to date.

nostrademons3• 7 years ago

You can't with 0x, at least not in the way you could at say Bitfinex or Binance. All of the assets remain in your personal Ethereum wallet until a trade is matched up.

That's the genius of the 0x protocol. The Relayers that LaunchKit lets you create are effectively just order books or other matching-engines that exist as a website or other service. They expose completed trades to the 0x smart contract, which atomically swaps the tokens of the trade. (Official 0x people can correct me here, I've done just a bit of research.) At no point does any organization other than you actually have control of your funds, nor can they receive them without giving you equivalent funds under the terms of the trade.

I've said before that the real use-cases for blockchains will be in doing stuff that nobody in their right mind would want to do because it's currently foolhardy. This is a good example. Giving money to a fly-by-night exchange is foolhardy - unless you don't have to give money to them. And that's what 0x enables: tradable assets without trust.

dcolkitt• 7 years ago

Exchange services is very difficult to differentiate.

Because financial markets are very globally fragmented. The hardest part about opening an exchange is banking, clearance and KYC/AML. For example the chance that a citizen of say Benin or Uzbekistan could open safely and easily open an account at one of the major crypto exchanges is essentially zero.

There's a lot of parts of the world where there's a captive audience with high demand for crypto trading, but no decent service available. There are pre-existing traditional brokerages and forex shops that have the local banking and KYC/AML infrastructure place, but don't have the tech for the exchange itself.

repomies68• 7 years ago

The market has ridiculous demand really, at times. But it highly depends on timing, location etc. And also resilience. If you run the exchange for long enough time, you will collect customers who will be coming back.

baby• 7 years ago

I'll give you my answer because I have a project which could have used this.

I created a dapp that allows people to do [stuff] which generate some erc-20 token for users. They can then use this token to access special features on the dapp.

It's easy to let users send and receive the tokens they have. But I want the token to have a value outside the dapp itself.

Unfortunately I cannot get this token accepted on coinbase and other exchanges. Just because it is not important enough.

I still want people to be able to sell or buy these tokens. The next best idea is to create a small exchange platform on my dapp: let people trade the token for ether or for other tokens. It's time consuming to code so I gave up.

Now this is where this thing would have been great.

Hope this helps.

bartimus• 7 years ago

It's there perhaps an angle with inter-exchange trading?

swinges• 7 years ago

Re: Why launch an entrepreneur...

There's actually several use cases here that are worth noting. As technology improves, more and more centralized crypto exchanges (where the majority of trading volume currently lies) are creating decentralized counterparts - yielding lower custodial risk among other benefits. Also, newer blockchains that don't have DEX's yet are completely untapped markets for developers. Lastly, there are a variety of different use cases beyond just an exchange that benefit from basic exchange templates: prediction markets, decentralized lending, etc.

Disclaimer: I work for Hydro (https://hydroprotocol.io/), a competing product.

proy24• 7 years ago

In a worldview where communities, orgs, products, countries, states, provinces etc. all have their own tokens, there will be need for niche, localized exchanges and 0x makes a lllot of sense.

gridlockd• 7 years ago

You have it the wrong way around.

As a customer I want an exchange so that the tokens I buy have some liquidity, at least in theory. You're not going to be listed on an exchange initially and those exchanges that do list smaller tokens tend to be sketchy.

As an entrepreneur, you figure out how your use-case benefits from tokens. For example, let's say you provide a product/service. You can sell tokens that can be redeemed for the product/service to investors at a "wholesale price".

There's no need for tokens to go "to the moon", just to serve as a medium of exchange and ideally provide some margin to you and/or your investors. You could also offer a company ownership structure for tokens, but now you're in securities regulation territory, which nobody wants to deal with right now, at least at the moment.

Of course a lot of crypto projects are garbage, just like most businesses fail and wipe out investor money in the process. The hype surrounding crypto certainly has massively underpriced risk, but the same could be said about stock like Tesla, Lyft or Uber.

mgraczyk• 7 years ago

When 0x was conceived, there were far fewer crytocurrency exchanges than there are today. It aimed to solve a real problem that still exists in some ways.

Since 0x is a blockchain project, it has moved at a snail's pace compared to the multitude of centralized and web-based "decentralized" exchanges that have sprung up since. These newer exchanges have largely solved the needs identified by 0x.

nostrademons3• 7 years ago

There's still a big problem with many of the centralized exchanges that have sprung up: a bunch of them are exit-scamming, or otherwise have had incidents that make your funds inaccessible.

That's the reason to do this on the blockchain: you don't need to trust that the exchange operators will keep your funds safe, because they don't have your funds.

homakov6• 7 years ago

An even better solution is to transform exchanges into channel hubs, and settle trades instantly without ever touching blockchain. I.e. trade dynamic remains the same, but now each party holds a balance proof and redeemable onchain collateral.

monkeydust• 7 years ago

Looks interesting will give it a whirl. At work we have semi-jokingly been discussing idea of a internal currency as a mechanism of getting one team to do work for another when there is no obvious mutual benefit for said work. Its increasingly becoming an issue for us.

nradov2• 7 years ago

Chargebacks have been used since forever in corporate accounting systems for that purpose. They work fine, no cryptocurrency or exchange needed.

willio58• 7 years ago

Hmm I think the whole point of using cryptocurrency is to not use actual dollars to incentivize work between parts of the company. Maybe you could use it to negotiate a promotion within a company, etc.

patricklorio2• 7 years ago

Given the limitations of 0x, I never thought of it as a good protocol for real-time exchanges (ie Coinbase Pro). For me, it's always fit more into a decentralized Over the Counter (OTC) trading alternative.

tudorconstantin• 7 years ago

The speed of execution limitation is not because of 0x, but because of how fast a tx can be registered on the block chain. It can't compete (they say for now) at settlement speed with a high performance centralized exchange.

But you have to trust those centralized exchanges with your funds. While with 0x you don't have to. One could say centralized exchanges can't compete on trustlesness with decentralized ones.

patricklorio2• 7 years ago

I completely agree. Until the blockchain can confirm transactions at lower latency I don't think the 0x protocol can provide a stand in replacement for a centralized exchange. I'm currently working on a project that goes about settlement a different way so trades can be confirmed instantly given a little trust. If you're curious, here's some details on how it works https://merklex.io/blog/decentralized-clearing-network/

hhorsley• 7 years ago

Incredibly cool

thehazard• 7 years ago

0x is seriously the best project in the crypto space right now.

TylerE• 7 years ago

What’s the bar for that? Not having actually scammed anyone elsewhere? Crypto is a sewage dump.

raidicy• 7 years ago

All demos crash Chrome Dev Version 76.0.3800.2 (Official Build) dev (64-bit)

vasilipupkin• 7 years ago

great product from technical point of view, no product/market fit.

joosters• 7 years ago

How does this manage to connect the real world to a blockchain? The fundamental problem with the promises of insurance/bonds/stocks/whatever on a blockchain is that it doesn't matter what the blockchain says, people's real-world actions aren't tied to it, so it's not trustless. And so the blockchain part is pointless.

Only if all the related elements are all virtual and on the blockchain can it do anything - so we're stuck with gambling and cryptokitties for real world usage.

dangero6• 7 years ago

Another related issue is that tokens are bearer instruments controlled by whoever holds the right private keys.

Most investments regulated in the US cannot legally be bearer instruments. This means there must be a ledger listing who owns what with real names attached. For public companies they must use a registered transfer agent to keep these ownership records. Private companies can keep their own records, but in most cases cannot use bearer instruments. What happens if I transfer you the token if there is a master ownership ledger with names and addresses? Nothing happens. The token record becomes out of sync with reality is the only thing that happens.

homakov6• 7 years ago

Isn't onchain here a transfer agent? Bearer is more appliable to cash, because it's physical. A token movement is still recorded onchain, i.e. there is a set of transfer agents and consensus among them. It can be tuned to support some regulation.

rickycook5• 7 years ago

well they don’t have to be... tokens are just code running on the blockchain, so you can apply anything you like to them... you can block a transfer until the recipient is in a whitelisted KYC list so that real world identities are known, and then you have your ledger

worried that loses the “trustless” of blockchain? hash the KYC entry and store it on chain so you make certain that the off-chain real world ownership information hasn’t been tampered with

tomhschmidt8• 7 years ago

Sounds like you're referring to security tokens, which place a securitized asset's cap table on a public blockchain. 0x works with all tokenized assets, so we're not opinionated about which assets people want to trade -- other companies like Harbor (https://harbor.com/) offer tokenization services. You're right that placing bearer instruments on a public blockchain presents some issues and the jury is still out a bit.

An alternative might be found in protocols like UMA (https://umaproject.org/), Augur (https://www.augur.net/) or MakerDAO (https://makerdao.com/) which allow you create synthetic tokens that trustlessly track the price of a real-world asset by creating financial incentives to rebalance the price of the minted tokens. MakerDAO has already been used to create over $80MM in a synthetic USD token called Dai (https://makerdao.com/dai/) and UMA has created a synthetic S&P500 token, allowing anyone anywhere around the world to get exposure to US Stocks (https://medium.com/uma-project/announcing-us-stock-index-tok...).

afro88• 7 years ago

Forgive the potentially dumb question but I'm pretty green in the crypto and finance spaces. What's the business value here? As in, why has this been funded so heavily? Does 0x take a cut of all trades on 0x powered exchanges and marketplaces? Or is the data that holds the value?

progval• 7 years ago

This website takes 50 seconds to load on a modern laptop with an ADSL connection. 7 seconds once it's cached.

homakov6• 7 years ago

Are orders settled onchain? If so, this is too expensive/not scalable. I'm looking forward channel/HTLC based exchanges.

willwarren89• 7 years ago

Yes, trades are settled onchain.

Too expensive for who? 0x protocol allows you trade digital assets with anyone in the world, trustlessly, through the internet, for $0.10-$0.25 per trade. While this isn't perfect for all use cases, it is an incredibly powerful capability.

Scaling is indeed a limitation for decentralized networks. You can learn more about our scaling R&D efforts here: https://blog.0xproject.com/0x-roadmap-2019-part-2-scalabilit...

homakov6• 7 years ago

It's $0.10 until it isn't. Average crypto exchange has hundreds of automated tx per second, once it is attempted onchain the fees go up. Atomic swaps onchain are good for large amounts and rare trades, but not for retail traders.

LAMike• 7 years ago

The next Fortnite could sell VBucks through an exchange like this

0x Launch Kit – Launch your own cryptocurrency exchange or marketplace

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