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?
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.
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?
95% of blockchain projects are a garbage heap, crypto currency is WAY overvalued, but the 5% of projects that are actually useful, and have a real need for a blockchain may just fundamentally change parts of how we live life
when micro transactions as a concept came to games, it changed the way people wrote games. when crowd funding became mainstream, it allowed more innovation from people with just a need and an idea
don’t dismiss the 5% useful for the 95% useless (and no, i’m not going to enumerate the useful cases because it’s been done to death)
*EDIT: and to be clear, i think the currency part of crypto currency is in the 95% not helpful (maybe unless you’re talking about stellar, which deals more with fiat/other currency exchange and for the most part eschews spending crypto currency itself)
> don’t dismiss the 5% useful for the 95% useless (and no, i’m not going to enumerate the useful cases because it’s been done to death)
It sounds like you can't point to any, like everyone else who insists there's a 'there' there. Nobody has been able to point to a single, legal, use case where crypto is better than a fiat based technology. Zip. None. But they're all sure it's there.
Don't you think with all the interest in the space, if someone had come up with one, it'd be enormous? EOS raised over four BILLION dollars a few years ago and still doesn't have a working blockchain. [1] You can fire up a blockchain in minutes. If there was a company that actually created something of value, it'd be worth more than the mewn y'all are trying to reach.
We've been waiting for a decade now, I'm sure OP will deliver /s.
How about real time cross border remittance and settlement? Current fiat approaches require large illiquid reserves, are slow, and not very scalable.
It’s also useful for transmitting money long distances when banks won’t do business and you want to avoid a paper trail (drugs). Fiat is perfectly fine for in person transactions, but not when distance is involved. You may or may not morally agree with it, but this is a proven use case.
> How about real time cross border remittance and settlement? Current fiat approaches require large illiquid reserves, are slow, and not very scalable.
It's bad for that, we've been through this. To send money you have to pay ~1% to an exchange in your home country, wait a few days for it to clear exposing yourself to huge forex risk, pay a $1 transaction fee give or take, then pay ~1% to an exchange in your destination country netting you 3-5 days latency, 2% fee plus $1 plus 10 minutes and incalculable forex risk. And the risk your exchange will literally just steal your money a la Quadriga. Or getting it confiscated en route like the $825M taken from Bitfinex by various government entities for laundering money.
There are a lot of solutions to this problem ranging from a credit card to buy things, TransferWise (0.85% fee give or take) to Interactive Brokers ($20 per million fee, or 0.002%) to Norbert's Gambit (free) to a wire transfer if you have to settle instantly. Or even just opening an HSBC account in both countries and moving the money instantly online via web banking.
Then there's Square Cash and Venmo for free domestic transfers, the free/instant domestic RTP network in the US, the free/instant SEPA network in Europe and the often free/instant Interac e-Transfer network in Canada.
> ...and not very scalable.
According to the Bank for International Settlements triennial report of 2016, the foreign exchange market cap averaged $5.1 trillion per day.
That's $1,861.5 trillion dollars per year. Forgive me for thinking that means the scaling issue is pretty much solved. It's probably the single most liquid market in the history of the world.
> It’s also useful for transmitting money long distances when banks won’t do business and you want to avoid a paper trail (drugs).
I did say a legal use case. One that neither violates laws nor sanctions. Worse, Bitcoin leaves you with a paper trail. You'd have to use Zcash or Monero.
> Fiat is perfectly fine for in person transactions, but not when distance is involved. You may or may not morally agree with it, but this is a proven use case.
It is, though, because you can use your Visa card to send money instantly to anywhere in the world that isn't sanctioned.
You've done a good job explaining how to do foreign exchange and how you can personally buy things in other countries. What happens if you're an international business that uses Bank of Melborne and has to pay vendors in Croatia using Primorska Banka? How does actual money get sent? Not credit that can be settled at a later date. Real money, sometimes large amounts that needs to be settled. A forex market is absolutely going to be necessary to do this, and as you pointed out those are very liquid markets which helps. A forex is only one piece of the puzzle though. You somehow need to get money out of Bank of Melborne and into the forex market. Then you somehow need to get the money out of the forex market and into Primorska Banka.
I get it, you want to play devils advocate, but every example you gave solves a problem that isn't "real time cross border remittance and settlement". They either aren't cross border (Venmo/Square Cash), or don't actually result in settlement (TransferWise, Norbert's Gambit), or aren't realtime (Interactive Brokers takes 3 days to settle your account FWIW).
EFT transfer to an exchange, purchase crypto (1% fee), withdraw to a different exchange ($1 fee), sell crypto (1% fee), SEPA transfer to recipient.
Classic path:
TransferWise handles everything (0.85% or less). Or:
EFT transfer to Interactive Brokers, FOREX exchange ($20 per million), withdraw via SEPA to Croatian account. They allow you to link both AU and Croatian accounts. Or:
Open an HSBC account in both places and use the online instant account-to-account global transfer tool (rates vary, ~2%) and send a SEPA payment. Or:
Wire money (pricey). Or:
With a brokerage account and an established business you can instantly make your payment through margin (3.9% per annum). IB will allow you to borrow Hrvatska kruna and withdraw instantly via SEPA payment. Then you can transfer in Australian dollars over EFT at your leisure.
Seriously, this is a solved problem and the crypto path is not faster, it's not safer, it's not cheaper, it's not easier.
> TransferWise handles everything (0.85% or less).
TransferWise doesn't do settlement. You still have to pay a merchant with a card who then needs to settle. No actual money is being settled through TransferWise.
> EFT transfer to Interactive Brokers, FOREX exchange ($20 per million), withdraw via SEPA to Croatian account. They allow you to link both AU and Croatian accounts.
EFT transfer to IB isn't instant. SEPA requires you to be using Euro. SEPA does handle settlement, but you still need to do settlement with both the EFT transfer as well as within your IB account. IB does have programs to allow early withdrawal before your account is settled if you quality, but again that isn't settlement.
> Open an HSBC account in both places and use the online instant account-to-account global transfer tool (rates vary, ~2%) and send a SEPA payment.
Again, SEPA requires you to be using Euro. Additionally, you would need to do settlement on the initial transfer to HSBC.
> Wire money (pricey).
The company you're using to wire money needs to handle cross border remittance and settlement, so how do they do it?
Just to reiterate... you've done a fine job explaining how a consumer can send money across the globe. You're not wrong to say that as a consumer there are perfectly acceptable solutions that can accomplish what they need. What you've completely failed to do is explain how to accomplish "cross border remittance and settlement" using Fiat in a way that is fast, doesn't require vostro account (i.e. illiquid reserves), and is scalable with the number of possible banks you'd need to transfer money to/from.
Ah I guess I misunderstood your question. My understanding is that settlement can be accomplished the way that TransferWise bootstrapped. They matched up two pairs of domestic transfers, where if I wanted to send money to Canada, they waited until someone wanted to send money to the US, then we'd each domestically transfer money to eachothers recipients. Minimal reserves, and everything happened domestically.
Visa is NOT instant. VISA transactions take up to 48 hours to clear. And in some cases the credit card processor can and will hold funds for even longer than that.
Some do, but some like Square will pay you out next business day free of charge or instantly for a small surcharge. To your point they’re floating that during settlement. It’s instant in the sense that the transaction is approved instantly and the settlement is a formality.
Settlement is not a formality. Money still has to change hands behind the scenes in various bank accounts. The only thing that's instant is the check for available funds. The actual transfer of money still occurs via ACH.
Within the US, ACH is being superseded by RTP realtime payments. SEPA is realtime in Europe. It's a formality from the perspective of the customer because the payment 'happens' immediately, and the merchant gets paid out within 24 hours, sooner if they really need it. Is this really a problem?
But still, definitely a promising improvement over ACH.
It is a practical problem that the merchant has to wait 24-48 hrs for funds. It's a cash flow problem. It slows down the speed at which that cash can be used to purchase other goods or services. For example, a made-to-order business has to wait for funds to clear from a customer (or front the capital) before they can turn around and order goods to produce the product a customer is purchasing. Which slows down delivery. And that effect is amplified across the whole supply chain.
> It's a cash flow problem. It slows down the speed at which that cash can be used to purchase other goods or services.
No. That's what lending is for. Square will allow you to cash out instantly for a 1% fee, they offer merchants a debit card they can use to access the funds in real-time as they're received for no additional fee, or you borrow some amount of float at today's incredibly low interest rates.
As a business in need of liquidity you can even sell your accounts receivable for less than 1% to invoice factoring companies. There's so many options out there.
Or the merchant can open a credit card and get fee-free interest-free loans for a whole month.
This is not an issue today, or rather, you’re making mountains out of molehills. There are ways of addressing this without crypto or throwing out the existing financial system. But more importantly what how many merchants wait for funds to clear before they go out and buy the supplies to do a job?
We get it- Hacker News is rabidly, irrationally anti-cryptocurrency. Which is ridiculous, considering most people here 1) Create or participate in online spaces and 2) Wish to monetize their services in ways that don’t necessarily involve advertising. You don’t think peer-to-peer micro transactions are going to transform your work in a fundamental way? Then I’m sorry, but you lack imagination.
No, I don’t think micro transactions have a future - peer to peer or otherwise - but not for any technical reasons. Humans suffer from decision fatigue [1] wherein making decisions just wears you out and you don’t want to do it regardless of size. A decision requires a costly, difficult evaluation of worth regardless. That’s why even though buying shows one at a time on iTunes would likely save you money, you pay for Netflix - because you don’t want to decide to pay. Micropayments aren’t a limitation of the existing financial system, it’s just accounting. This is a limitation of human physiology. We could have it right now if people wanted it but they just... don’t.
AWS became successful party because of the "micropayments for servers" style hourly model.
Micropayments are most certainly a limitation of the current financial system: Pulling together all the disparate banks of the world to cooperate to create a global API to facilitate payment for <$1 amounts? Don't assume that all problems are technical: This would be near impossible, where cryptocurrencies are doing this right now.
Flattr isn't micropayments. You as a reader pay a decidedly non-micro amount into a pool monthly that's then divided between flattr sites based on apportioned viewership on a monthly basis. This is the Netflix model, and exactly what I suggested. This is accounting, not micropayments. Neither the viewer nor the content creators ever transact sub-penny amounts, they only exist in the context of calculation and apportionment. And they do this specifically because people don't want to make individual purchasing decisions.
> AWS became successful party because of the "micropayments for servers" style hourly model.
Again, that's accounting, or more accurately, metered billing. A low price for services is not micropayments either.
> Micropayments are most certainly a limitation of the current financial system: Pulling together all the disparate banks of the world to cooperate to create a global API to facilitate payment for <$1 amounts? Don't assume that all problems are technical: This would be near impossible, where cryptocurrencies are doing this right now.
If this were something people wanted, you'd load up a, for instance, PayPal account and drain it pennies at a time. Once an aggregate payout to a specific merchant exceeded the transactable threshold it would execute automatically. This can be done today. People just don't want it.
And it only works like that because of the current financial system. Flattr exists because of the lack of a solution in the current financial system: Cryptocurrency (eg ETH with Web3) would allow sites to build a Flattr-like system without the middleman, and cut down on the overhead of actually building a company around it.
People don't want that. You're describing a solution in search of a problem. We have the technology to execute on this right now but nobody does, because people don't want it. If they wanted it, we'd have it, and we'd be iterating in the problem domain not the solution domain. There's no pent up demand for a world in which you're constantly forced to make tons of individual purchasing decisions.
More importantly though, people have learned not to value content. This is a huge problem for the media industry. Nobody wants to pay anything at all for what they create, they want to pay with their time and attention - through ads.
> when micro transactions as a concept came to games, it changed the way people wrote games
Has there ever actually been a case where microtransactions made for a better game? Everything I've read about what it's like working for studios that rely on them is creepy stories about trying to chase 'whales'.
If think in some games where cosmetics are the only commodity it works well. In-game customization frankly was not a priority for game-devs, as it did not turn a profit. That is until games like League of Legends et al made customization micro-transactions their entire business model. It's meant newly fantastic support for the art departments! It's also lead to a number of games that are constantly updated over many years instead of just made for release, so one can play their favourite games without them become stale. Yes, this has existed in the form of a subscription service before, but cosmetic micro-transactions have effectively socialised some games, where the whales pay for game development and less wealthy individuals still get to enjoy the game without paying anything! Path of Exile probably wouldn't exist without micro transactions, at least to the popularity it has become, and I've never had to pay a penny to play that game.
So there are a few cases. That's not to say that most mobile game micro-transaction models aren't absolute hot, filthy, dirty, disgusting, stinking garbage.
I wouldn't say "better"; That's pretty damn hard to substantiate! What's the other option? Well 1 is that the game wouldn't exist. I guarantee that Popcap [1] wouldn't be too happy, and there are plenty of people that get enjoyment from their games (arguably sometimes to an unhealthy degree). If micropayments weren't a thing, then many of their games would likely not exist.
I don’t see what is the point of this comment other than “hurr durr blockchain bad”. Providing a marketplace tokenised assets/digital assets is useful.
In what way is it useful? You say that like it's obvious, but it's not. It's on the challenger to explain why it's better than the status quo, not the other way around.
Because there is no status quo? (And solutions that aren’t better than status quo should be automatically thrown in the trash?). Now if your question is why are markets useful, then that is obvious is it not?
Secondly, I find this viewpoint highly regressive, the asking of why is X useful question. We can go to the moon but why is it useful? These type of questions are ultimately backwards and short sighted. Why do we spend X to research Y and why is Y useful is not clear until $many_years. It may not be obvious to you if it is useful or not but it is not up to you to decide (the invisible hand of the market decides).
From your other comments, it is clear that you have already decided that “all cryptocurrency are scams” so I don’t think you are arguing this point in good faith.
> Because there is no status quo? (And solutions that aren’t better than status quo should be automatically thrown in the trash?).
I think in general, people are excited by technology that's innovative and promising. It doesn't have to solve problems better or more efficiently today but it should have some clear path to doing so, yeah.
> Now if your question is why are markets useful, then that is obvious is it not?
I guess what I'm asking is why are markets for crypto tokens useful? If I built great tech around markets but it only let you exchange week old chicken nuggets would that be valuable?
> From your other comments, it is clear that you have already decided that “all cryptocurrency are scams” so I don’t think you are arguing this point in good faith.
Substitute 'cryptocurrency' for 'entries in a MySQL store' and re-read everything that's been posted here.
Going to the moon yielded amazing technological advances, in engineering, in materials science, in physics, chemistry, national identity, etc and promises to do so again as we iterate. Capital and research expenditure isn't negative sum. Then who knows what we might find out there?
Crypto is not new technology in any way. It's a 10-year-old recombination of 20-year-old tooling. Merkle trees and hashcash. That's it. All the money being spent on it is paying miners in China to repeatedly hash numbers and pay their electric bills. There's no research, no innovation. Just people selling each other spreadsheet cells they're sure are going to be worth something one day because 'blockchain'. It's religious, not scientific. Combine that with the world of finance, zero regulation and irreversibility, there's no way to make it anything other than a scammer's paradise. Scamming people is a feature, not a bug. All based on what, the idea that 'inflation is theft' and 'the gubmint shouldn't tell me who to send money to'? Any ECON-101 class will set you straight.
It's actively anti-efficient, regressive in terms of user experience and negative-sum: the more the price goes up the more you have to pay miners, the more cash needs to come into the system to keep the price stable. PoW isn't decentralized (>51% of BTC hashpower is concentrated in a few mining pools in the PRC), it's not trustless (PRC), it's not fast (7tx/sec), it's not cheap, it's not a good store of value and it fails to solve human problems (deflationary in the face of an expanding population and economy).
It's abjectly failed at every one of it's stated goals, all that's left is 'number go up.' What's to like?
If crypto was a fad it would have died long ago. Yet here we are still talking about it with more money and development behind it than ever before. I really encourage you to read this newspaper column from 1995 predicting the end of the internet because just as you have put it, there are already way better options out there. https://thenextweb.com/shareables/2010/02/27/newsweek-1995-b...
> If crypto was a fad it would have died long ago.
That's appeal to authority. Let's focus on what it does and doesn't do, and how well. The internet wasn't built to literally become less efficient the more data was transferred over it, right?
Why are we judging it on it's capabilities of today? Scaling is a problem actively being worked on. Again, your comment draws a parallel to the aforementioned article. There are certainly problems, but some of us see the potential for a true digital cash and people will continue to work on it one way or another until it's achieved.
It was built on the crudest app tech stack vis a vis HTML, CSS and (not even sure JS was a thing yet in 1995) JS. Not many could predict the cloud becoming a multi trillion dollar industry in 1995.
> It's a 10-year-old recombination of 20-year-old tooling. Merkle trees and hashcash. That's it.
This is an unfair characterization. Every technology can be described as a recombination of what existed before. Bitcoin solved the distributed consensus problem in a completely new way. This was a long open problem.
> There's no research, no innovation.
There's a ton of blockchain motivated research going on in signature schemes, distributed consensus, formal verification, zero knowledge proofs, verifiable delay functions, game theory, governance, economics, etc.
I don’t see why crypto skeptics feel the need to regurgitate the same tried and debunked talking points into every single thread about crypto. This unhinged rant might as well be a copypasta at this point. None of this thread is even about bitcoin.
You bring up an interesting point in that I can’t think of another technology out there quite as polarizing as crypto. It’s almost fanatical devotion from both sides. I disagree that the points are debunked, I think the current thinking from the pro side is that those are “today’s problems” and the future will be different. I think the anti camp like myself are frustrated by the religious devotion to something that in our opinion represents regression from the status quo as a north-star, driven in part by uninformed debaters assuring us crypto will solve problems they themselves don’t understand. I think it’s like how my dad used to hate medical shows because they were to him a parody of his profession but to the less informed of us, just kinda fun and cool.
I know bitcoin isn’t the only crypto, I also know proof of work isn’t the only algorithm out there. Bitcoin is the best known and most successful, and proof of work is the only algorithm so far proven to work as specified. I was giving more credibility to the space than I usually do with those simplifications, if I wanted to make fun I’d call on our boys Tether (a fraud [1] run by a fraud who tried to start a Ponzi scheme [2] and whose connection to Bitfinex eventually got revealed in the Paradise papers [3] - in which most crypto prices are denominated), IOTA (it’s ternary for no reason, isn’t decentralized, and tried to write their own hashing algorithm and when that failed they called it a DRM scheme [4]) and Dentacoin (your dental records on the blockchain for no discernible reason [5]). Even a team trying to start a BTC ETF concedes 95% of all volume is fraudulent [6]. That’s a bad place to start no matter how you slice it.
Apologies for offending you, though, that wasn’t the intent.
Look at numeraire, nothing on the internet could achieve what numeraire has done, it puts skin in the game for financial predictions. The guys there were able to run a hedge fund out of it.
If we go to computing primitive. The internet was formed to distribute information, not sensitive information.
There is no protocol on the internet to store, share and process sensitive information like identity data, financial data or digital assets.
An analogy to this absurdity is that in the real world, people distribute newspapers on bicycles and trucks whereas money/ gold is moved around in armoured trucks with gunmen.
The internet doesn’t have a protocol that acts like the armoured truck with gunmen, bitcoin was potentially the first one to do so.
Is a speculative asset like bitcoin a gamechanger, I don’t think so, but I do think there’s value in adding native layers on the internet that enable the exchange of sensitive information.
I don’t think it is possible to offend me with your posts (for the record I didn’t read it, I am sorry if you spent any time writing it). Maybe you should start a blog or something instead of ranting about something entirely offtopic and trying to derail the thread.
> 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.
Launch Kit is not an ICO or promoter, it's a platform for crypto exchanges. Could you elaborate why you're referring to a comment detailing the SEC going after ICO scams?
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.
> 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.
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.
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.
> Regulation is clearing up and there are many biting at the bit for this.
In what way is regulation actively harming your ability to purchase shares of a legitimate operating business without overextending yourself financially? Please be specific.
The ability to compensate someone who is creating value in a network with ownership of said network (eg giving an early uber driver, or Airbnb host, options or equity.) this is currently not possible to do in the US, but is possible with crypto networks.
If you're willing to trust the entity holding your assets, then a database will suffice. The non-custodial features of 0x enable exchange without reliance on third parties.
Yea I mean, if we're going to go down the hole of "cryptokitties" and other asset exchange, let's be honest, we're reliant on a third party to create the value in the first place already.
judging a cryptocurrency projects usefulness on cryptokitties is like judging a front end frameworks usefulness on “TODO MVP”: it’s just the example of a tradable asset that everyone uses BECAUSE it has no value and anyone can just set it up to test.
substitute crypto kitties with something more real, like say a government starts to issue ownership information for cars (pink slips in the US i think? idk exactly) on the blockchain... there’s live, traceable ownership information, duties can be calculated and applied automatically, and traded on a platform like this. this is an asset that has real value because it exists in the real world; it’s not the bit of paper that has value, it’s the significance that it constitutes ownership of an asset
*EDIT: and i’m not saying that this idea has value either; it was just an example of something with intrinsic value rather than “third party created value”
> judging a cryptocurrency projects usefulness on cryptokitties is like judging a front end frameworks usefulness on “TODO MVP”
If you sold one of your TODO notes for $170,000 [1] frankly I think that'd be a fair judgement to make.
> substitute crypto kitties with something more real, like say a government starts to issue ownership information for cars (pink slips in the US i think? idk exactly) on the blockchain... there’s live, traceable ownership information, duties can be calculated and applied automatically, and traded on a platform like this. this is an asset that has real value because it exists in the real world; it’s not the bit of paper that has value, it’s the significance that it constitutes ownership of an asset
You know you can do that with a database right? Literally, a database. Like we have today. That's how it works today. You're trying to introduce complexity and inefficiency into the US government. It's like trying to sell ice blocks in the arctic, but somehow dramatically less efficient.
I already trust the government to allow me to drive my car. Why on earth does this need to be decentralized? It's the definition of centralized. A vehicle registration reflects the governments acknowledgement that you own that vehicle and are allowed to drive it at the governments discretion. If they revoke it your blockchain entry will be totally worthless and just out of sync with reality. The value is created by the government.
> If you sold one of your TODO notes for $170,000 frankly I think that'd be a fair judgement to make.
Other than the fact that people spend stupid money on stupid things [1], I'm not sure what your point is
> You know you can do that with a database right? Literally, a database
Yes, and this is a generic solution that applies to any kind of asset, and then software like 0x can plug in to trade said assets. Generic cases are always more complex than specific cases
> trying to introduce complexity and inefficiency into the US government
Well actually I'm trying to do nothing of the sort: As I said, it was an example of asset trading of something with intrinsic value, and not a valid use-case
> I already trust the government to allow me to drive my car. Why on earth does this need to be decentralized?
It has nothing to do with trusting the government, or driving a car. It has to do with transferring ownership information of an asset with intrinsic value between 2 parties, ensuring payment without relying on (possibly expensive) escrow
You seem to be conflating a number of examples that I made to explain specific points to be a proposition of things that should actually be done
> It has nothing to do with trusting the government, or driving a car. It has to do with transferring ownership information of an asset with intrinsic value between 2 parties, ensuring payment without relying on (possibly expensive) escrow
The government is the entity that recognizes the change of ownership, it's not something you can do without their approval. Your change of ownership is being filed with the government and is available at their discretion - they can choose to block it. Car registration isn't for your benefit. If you require the government's approval you may as well store it in their database. I just saved you a blockchain :)
And yet again you've missed the point... So I don't understand how the ownership and transfer of ownership of vehicles works in the US (where, BTW, I do not live, and have no need to understand).
Let me say it again so it's really obvious:
It has to do with transferring ownership information of an asset with intrinsic value.
Stop arguing the specifics of the admittedly flawed example that I came up with between starting to type, and ending typing the sentence.
I respect that may have been a poor example, but I think you’re missing my point, which is that the information on the blockchain isn’t relevant if it’s not in sync with state off the blockchain, doubly so when not backed by law.
Ok your car is registered on the blockchain and you fail to pay your bills. Now it belongs to your lender. Well, the blockchain says one thing but the lenders tow truck says another. So what good is it? Blockchain technology does not address this critical component which is the faith that reality reflects the consensus on chain.
The reason the only thing that has any traction at all is cryptocurrency is that the entire concept is encapsulated on chain. The second the chain becomes a record of the real world it falls over because the world won’t change to reflect the blockchain and the blockchain won’t change to reflect the world. Only cryptocurrencies have intrinsic value captured on chain, and I am being generous when I say value.
The reliance on the severely distorted plutocratic ownership of 0x, Ethereum, and most of the cryptocoin supplies is a huge risk factor that is often conveniently swept under the rug.
By building on 0x, or other cryptocoin software it's essential to be aware of the elephants/whales in the "economy" of cryptocoins and tokens.
Yeah that was brutal; the definition of oh, you lost a few thousand dollars? That sucks ETH transactions are irreversible. Now I lost a few hundred million so all of a sudden it’s reversible, no harm no foul -- and most importantly, no lessons were learned that day.
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.
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.
The properties of the general medium and of exchanges themselves would provide value if built upon. At the core of of the value proposition is the value derived from more efficient human coordination.
- Giving certainty about the properties of the token asset to the user. Whether trading the exchange or in use at a service which accepts the token, the user verify what the token actually does. And what might change! Reduces risk of policy-change by owners and managers of services.
- Giving control of the token asset to the users, or at least a verifiable level of control. Reduces risk of interference.
- Securing the token asset, protecting the asset and related data. Reduces risk of loss.
- Enabling easy integration or migration to other smart contract systems, due to token standards like ERC-20 and ERC-721. Reduces risk of vendor lock-in. Powers beneficial second-order effects.
- Enabling composability. With primitives like various kinds of tokens and "exchange" addressed and standardized, new layers can be built, new configurations found. Creates value by reducing steps for users as they engage with each other within token-based smart-contract systems.
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.
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.
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. :)
I sincerely hope permissionless solutions make such permissioned solutions obsolete. There are people, who by accident of their place of birth, are not permitted to use permissioned financial systems.
Yes. What many of the well-intentioned people (many with libertarian/cypherpunk/anarchist ideals) in the blockchain space are building now might become enablers of the perfect control system.
Zero-knowledge proofs or RingCTs? Great, require disclosure and reporting of proofs or view keys to the man, who will enforce it for all interacting parties.
"You can't enforce bans on running nodes"? Well, start enforcing strict control of the public IP space so everyone address has a responsible individual behind it and put severe penalties on unlicensed crypto/privacy enabled assets/what have you.
I am thinking more and more we need to seriously consider moving the web to something like I2P or Freenet before it's too late.
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.
>> 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?
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.
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.
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.
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.
If that’d happened 10 years ago, I think they’d have come out feeling pretty good. Nobody uses blockchain for anything of value except speculation and scamming each other today. Maybe this decade will be different but I’m betting it won’t.
Indeed. I bet MySQL will have a bigger impact on society over the next 10 years than crypto will. If anyone wants to take this bet, I suggest stakes lower than the ones John McAffee chose -- he may be one set of genitals short by the end of next year.
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.
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 :)
To expand on this - a middle ground between the centralized exchanges dominating today and the (relatively) slow and expensive ones on the Ethereum mainnet would be a sidechain using a different physical topology and consensus model.
Some examples that have been gaining buzz recently (these are just examples, there are alternatives to each) if you want to read up and grok the statr of implementation and thoughts today: Plasma chains, PoA Networks xDAI, SKALE, PegaSys.
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!
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.
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
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.
Or they can verify them themselves since it's all open source. And for the less technically inclined there's also 3rd party audits and an active bug bounty. Point being, everything is open and transparent, and none of it happens behind the scenes, so that's where the "trustless" comes in.
While yes, that word is overused and misunderstood, and regular users still admittedly do put trust in open source code on a public network, it's a much more open system than we've been able to have before. The trust users depend on in this instance doesn't rely on faith in any single entity to tell you what's changed in their private DB behind the scenes, you can verify it for yourself.
Remember that the smart contract is committed to the blockchain and can never be changed.
Just like when you push your code to a git repo. It's guaranteed immutable, tamper proof. Data side is handled by appending to the blockchain as well. But this doesn't mean it's bug-free.
You have essentially a tamper proof Database with Stored Procedures that doesn't need DBAs. I imagine it as a giant growing BitTorrent file that is maintained (and rewarded) by many computers worldwide. Any tampering to this file, it's immediately detected via hashing (just like in BitTorrent).
The only way to break this is by branching out like you do in git. But in Blockchain, you will have to convince those computers to maintain your fork. And on this note, a Blockchain is technically not controlled by 1 entity, it is the choice of every individual blockchain maintainers (aka miners).
Yes, the thought leaders in the eth community are indeed influential just like Linus Torvalds is to the Kernel project. But that doesn't mean you can't fork Linux should you disagree with him.
What you are saying is not a technical problem. But a problem in Human Society. Or even just an inherent due to it's novelty. This issue is present to almost anything that is not yet widely adapted.
With that said, giant evil mega corporations have grouped up to work on an 'enterprisy' version of Ethereum with a standard spec for interop. We're on a good track to get more 'thought leaders'.
Whether it's a technical problem or a human one, the bottom line is that "guaranteed immutable, tamper proof" is not true. It doesn't matter that Linus Torvalds is influential on the linux kernel project because the linux kernel is not claiming that it is "immutable and tamper proof".
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.
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.
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.
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.
An account is controlled by a key AND the validators who choose to record their transaction. One cannot just share the key with others. First, they need to record it with ledger keepers. How is it not like transfer agent?
Yes, the transfer agent can ask for a key signing before moving funds, but they also need to be able to transfer WITHOUT the key. Examples would be a key loss or transfer of ownership due to court order. I don't know what the key is doing since it's optional and highly fallible proof of transfer intent.
At best the key signing is providing a partial audit trail with no case law to support any liability transfer created by its use. Typically transfer agents take very little liability by requiring a medallion signature before allowing a transfer.
In a custom blockchain it can be configured to have admin method to transfer without a signature. But the question is why.. Why assets cannot be bearer?
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
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...).
I disagree with the point, but for the sake of argument, why is this a negative? Large portions of pure mathematics would be deemed irrelevant by this standard. Blockchains and smart contracts are still a burgeoning technology, and projects like this demonstrate what is possible in a tangible way. Perhaps this particular project has no use that you can foresee, but it's the foundation upon which future projects of worth will be built.
I love pure mathematics but I don't quite agree that all the blockchain stuff falls in the same vein at all.
There is no "science" here. No positing of a theory that explains what happens when X happens. After the original paper which largely built on ideas that already existed, I don't believe the field of consensus protocol has been greatly enhanced by the crypto fad. In fact, almost all products, papers, and developments have been for the express purpose of commercializing a product.
Math does not purport to be "market-ready." It's foundational, and honestly, it still does need to be used in the sense that the measure of a good theory is it's applicability to actual problems (although sometimes, the problem itself isn't always easy to grasp).
I'm on phone and don't have links, but a lot of progress has been made in cryptography as an effect of applied research related to blockchain projects. Zero-knowledge Proof systems, for example.
A lot of other stuff could be argued to fall on the border of Computer Science. Do networking protocols like TCP fall into CS? Then so should Lightning.
I do think that Greg Meredith et als research and at lesst one of IOHK's papers count too.
My intention wasn't to focus on the mathematics of blockchains, but rather that experimental research in general should not be dedicated solely to those causes that solve real problems for real people. Proving Fermat's Last Theorem did not solve any tangible real life problems (that I'm aware of), but we pursued a solution nevertheless.
In terms of the original point, I agree that being able to run your own decentralized exchange is not a problem facing people today. However, by pushing the boundaries of the technology, we are building a foundation of knowledge and engineering for how to use smart contracts on blockchains in the future.
Also, 0x is open source [1], so in my opinion, this is much more akin to a research project than a commercial product. If commercial products can be built on it, even better. But I think we should be even more long term sighted than that, and accept that there are uses of these technologies that have yet to be discovered, and we won't be able to discover them unless we experiment.
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?
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.
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.
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.
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.
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.
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.
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.
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.
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.
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/
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.
I think you have a misunderstanding of how the protocol works. At no point do your assets "go into the relay." The relay only takes your signed orders (not the actual assets), and the tokens literally do not leave your wallet until the time the trade is executed. No trades can be executed unless they have a signature generated by your private key.
0x is a decentralized, non-custodial exchange protocol. The UI could have malware though, which is why it makes sense for various relayers to have a single UI.
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.
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).
Bisq has that and has been around for years. Want a single, stable, smooth and fast fiat gateway with strong guarantees like you have on he realized exchanges? I think that's fundamentally incompatible with not having intermediaries. As others mentioned,calling IDEX decentralized is weasel-wording at best. It's a hybrid.
IDEX is semi-decentralized: order-matching is handled off-chain, funds must be deposited into a centralized smart contract that handles all settlement, but the smart-contract itself and balances within it are held on the Ethereum blockchain. It prevents some forms of exit-scam or hack (you don't need to trust that the IDEX principals won't send your funds to a bank in the Bahamas), but retains vulnerability to a bug in the IDEX smart contract allowing a hacker to obtain them. The IDEX smart contract is at least public and auditable, though.
There are 4 core components to a decentralized exchange:
(1) storage of funds, (2) order books, (3) order matching, (4) settlement. Unless you have all 4 of these it is a hybrid exchange. Calling it anything else is misleading an disingenuous.
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.
OP is referring to the curious death of the founder of QuadrigaCX who supposedly was the only one with the keys to cold storage.
This does not apply to 0x-based exchanges at all - it's a nuncustodial solution, meaning you can put orders without depositing coins and ensure they are only transferred out of your wallet as part of a correctly executed trade, atomically.
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?