Trading one of the many ERC20 tokens can be quite problematic. It is difficult to find exchanges supporting most of these tokens. Even platforms such as Bittrex have not listed the vast majority of them, for obvious reasons. A lot of vetting needs to occur first and foremost. Thankfully, there now is a way to trade ERC20 tokens without having to rely on exchanges.
A Different way to Trade ERC20 Tokens
This entirely new concept is a mixture of using the 0x protocol and MetaMask trading. Combining these two platforms into one creation allows for trustless trading of ERC20 tokens without relying on an exchange or trading platform. In fact, one can trade any ERC20 token over the counter in exchange for any other currency. This is a decentralized way of trading ERC20 tokens which will certainly make a big difference in the world of cryptocurrency.
The 0x trading protocol is quite an interesting development. It is mainly designed to facilitate the trading of tokens created on the Ethereum blockchain. Considering that there is no shortage of such tokens these days, it makes a lot of sense to slowly gravitate toward a decentralized OTC trading protocol. 0x, which went live around 24 hours ago, aims to provide that functionality to users the world over. It remains to be seen how it will be received by the community.
Various Ethereum-based projects have already confirmed they will be compatible with the 0x protocol moving forward. That list includes Augur, Aragon, Chronobank, and Melonport, to name a few. However, the opportunities are virtually limitless, as a post on Reddit shows how easy it can be to create an OTC market for ERC20 tokens. Although these offerings are still fairly limited in scope, there is a lot of potential there. It will be interesting to see how many people wish to combine 0x with Metamask for decentralized exchange features moving forward.
0x is a protocol rather than a graphical user interface, so someone will need to come up with a convenient GUI. Using Metamask makes a lot of sense here, although it is not the only available solution by any means. There is no central party when using 0x as everything is decentralized and trustless. According to the developers, there is no way this protocol can be hacked. Rest assured that someone will certainly give it a try regardless.
The 0x protocol can support any digital asset adhering to the ERC20 standard. A new token standard is currently in development, and it will be interesting to see if the protocol will support the new type as well. There does not appear to be any official commitment at present, but the token was only recently released. Transaction fees are denominated in ZRX, the native 0x token.
It will be interesting to see how this protocol evolves over the coming weeks and months. It has a lot of potential to further decentralize the way we think about exchanging ERC20 tokens on a global scale. Since most exchanges often wait weeks, if not months, to list new tokens, an over-the-counter solution would certainly be useful. The 0x protocol may prove to be a valuable ally in this regard.