Say hello to 0x v4
The 0x v4 governance vote was completed on January 23rd with the overwhelming majority of participants voting “Yes” to give users and developers access to major improvements in pricing, upgradability, and composability of the protocol.
0x v4 is now the canonical 0x protocol, replacing v3 and v2’s functionality for ERC20 tokens (the DeFi token standard).
Special thanks to the 2362 unique ZRX holders who showed up with 11.6m ZRX to support the proposal. It was the largest vote by ZRX voting power and second largest by number of ZRX holders represented.
It is encouraging and refreshing to see such a large community of token holders get together and participate in the governance of the open protocol.
What are the primary benefits of 0x v4?
It is the most gas-efficient DEX protocol. 0x users should expect more competitive liquidity from professional market makers (up to 70% gas savings for RFQ liquidity, 10% for limit orders). In addition to that, it is cheaper to trade on both Uniswap and Sushiswap using 0x v4 than it is natively on those platforms.
It is DeFi native. Apart from its industry-leading smart order routing algorithm, 0x v4 enables DeFi legos (e.g. borrowing, debt repayment, provide liquidity, etc.) to be injected natively into the context of a trade. The only transformer deployed right now is a simple ETH wrapper/unwrapper, but there is no shortage of DeFi legos that can be implemented with the same pattern. For example, it could be possible to provide liquidity into a pool with any arbitrary token, swap liquidity pool tokens, or swap your collateral on Compound or Aave on the fly.
It offers plug&play liquidity. V4 allows custom on-chain liquidity pools to be plugged in via a standard interface before being automatically aggregated with all other liquidity sources. Whether you’re a market maker with a proprietary on-chain strategy or a developer building the next-gen public AMM, V4 can support your use case out of the box.
It is automatically upgradable. Thanks to this new architecture and to the 0x governance process, the protocol will be able to iterate more quickly based on what the market needs, without having to wait for the ‘next 0x version’. ZRX holders should expect more ZEIPs and governance votes on specific features in the months to come.
Existing integrators of 0x API /swap endpoints will automatically begin to access liquidity at more competitive prices as v4 comes online. All market makers currently serving RFQ (Request for Quote) liquidity have already completed the migration process and will fully transition to v4 as 0x API’s smart order routing is updated. The /sra endpoints and 0x Mesh will also begin to support v4 in the coming weeks.
If you or your team are interested in tapping into 0x API’s professional grade liquidity, please refer to the 0x API documentation here. Documentation for integrations with the 0x protocol smart contracts can be found here.
We will share more updates on the migration process and deep dives into specific v4 features in the coming weeks. Stay tuned!