Meet Hydro: Large Relayer Forking 0x, Axing ZRX
DDEX is a decentralized exchange stack that made a name for itself in the cryptoverse in becoming one of the largest liquidity relayers on the 0x protocol. Now, DDEX’s backers are forking and editing 0x into Hydro, and 0x’s ZRX token is on their chopping block.
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Hydro Opens the Floodgates
Tian Li, speaking on behalf of himself and the other builders of the DDEX decentralized exchange, declared in a December 14th notice their team would be forking 0x into Hydro, a new protocol they’re aiming to better fulfill DDEX’s on-the-ground needs.
The departure is a notable one for 0x. DDEX was one of the protocol’s largest relayers, which create cryptographically-underpinned order books and facilitate trades accordingly.
Li noted problems with “order collision, front-running, and poor liquidity” as general factors that drove his team to decide they could forge a better system.
The DDEX team had built the exchange to leverage their own resident network layer dubbed Hydro Protocol, which hitherto leveraged 0x as an order-settlement layer atop Ethereum.
With an 0x fork in the cards, the Hydro team will be merging their previously outlined network and order-settlement layers with a mind toward optimizing trade liquidity.
“Although we are using the term ‘fork’ to give proper credit, we rewrote a large portion of the codebase,” Li said.
“We plan to ship a new order schema, an engine capable of true matching, robust market orders, and a fundamentally different liquidity sharing model. The ZRX token will be removed as well, because fee-based tokens create unnecessary friction.”
HOT had been outlined as a way to provide incentives for liquidity providers, offer liquidity pool memberships, and create a market maker bounty system.
ZRX Under the Microscope
As it stands, the departure of DDEX seems hardly a mortal blow for either 0x or ZRX. And 0x’s creators, in building an open-source project, are likely unsurprised to have forkers on their hands.
Yet DDEX’s respectful flight falls far short of a ringing endorsement, too.
In their talk of moving away from ZRX and a fee-based system altogether, the Hydro team is saying, in effect, that these two elements aren’t necessary for relayers’ operational needs.
If that line of argument is followed, then one could conclude 0x’s model may be structurally flawed. Reasonable people can disagree on that point, but it’s a debate that undoubtedly surfaces in the wake of such a fork.
As for ZRX itself, it’s been a sweet and sour 2018.
Sweet, because the token ascertained an ever-coveted Coinbase listing this past October. Sour, because the token’s price has sunk to around $0.25 USD after reaching a high of $2.57 on the year.
Going forward, let’s see how the token and its parent protocol weather Hydro’s high-profile, though courteous, mutiny.
What’s your take? Are you surprised by the Hydro fork, or are such splits just par for the course in the cryptoverse? Let us know in the comments section below.
Images via Pixabay, Useful Coin