ConsenSys-backed 0x Protocol Extension to Improve DEX Architecture

The developers of the 0x protocol, an open-source specification that enables “low friction” peer-to-peer (P2P) exchange of cryptocurrency tokens on the Ethereum (ETH) network, have been working on a zero-knowledge proof (ZKP)-based solution, known as StarkDEX.

Israeli software-as-a-service firm, StarkWare has reportedly partnered with the San Francisco-based creators of the 0x protocol in order to perform various tests on the ZKP-enabled StarkDEX platform. According to recent estimates, StarkDEX can handle around 500 transactions per second (TPS).

ZKP-Powered StarkDEX to Become “Core Part of 0x DEX Stack”

In statements shared with Coindesk, Uri Kolodny, the CEO at StarkWare, noted: “[Our goal is to facilitate] non-custodial trading at scale.”

According to Matt Taylor, the Marketing Lead at 0x:

Our [plan] is that by the end of this year we’ll have this in production, on mainnet, so that people can actually use this technology. … We intend to have this be a core part of the 0x DEX stack.

Taylor, a former Marketing Manager at Abra and Square, revealed that 0x protocol-enabled platforms have facilitated over $700,000 worth of total trades. Founded in October 2016, ZeroEx, International, the company behind the 0x protocol, has helped launch several decentralized cryptoasset exchanges (DEXs) that settle thousands of trades each day.

This, according to the latest financial data from 0xtracker.com, which shows that more than $330,000 in trades were processed using the 0x protocol in the past 24 hours. However, 0x’s creators acknowledge that they have not yet been able to effectively scale the decentralized token transfer mechanism.

Only Handling Three Trades Per Second

Elaborating on the inefficiencies of a crypto trading platform that cannot scale, Kolodny said: 

A marketplace where only three trades per second can be settled is a very illiquid market.

Kolodny, an MBA graduate from the MIT Sloan School of Management, confirmed that it would take several months before StarkWare’s alpha testing is completed. After conducting the tests, the ZKP-enabled StarkWare software will become available for 0x relayers and various other blockchain-based platforms.

Backed by investments from the leading Ethereum-focused project incubator, ConsenSys Ventures, Ethereum Co-Founder Vitalik Buterin, and the Electric Coin Company (formerly known as Zcash company), the 0x protocol is primarily being used by StarkDEX to help develop scalable DEXs.

Explaining the importance of scalability, Kolodny remarked:

If we provide scalability engines for trading, or gaming, or any application that one wishes to run on the blockchain, you can use [StarkWare] computation that takes everything else you’re doing off-chain and achieve massive scale