0x’s daily average unique traders grew by 7% QoQ, averaging 28,300 daily unique traders.
0x daily application integrations grew to a record 119, up 3% QoQ.
0x API volume declined in Q2 after two previous quarters of growth, falling to $5.3 billion, down 18% QoQ.
Following the close of Q2, 0x introduced its V2 pricing engine. Notable features include splitting trades across multiple liquidity sources and identifying intermediate trading pairs in a swap to access deeper liquidity, among others.
RFQ volume on available pairs declined 19% and accounted for 43% of volume, an 11% decline QoQ.
Primer
0x is an integrated suite of decentralized finance (DeFi) infrastructure APIs that enables developers and teams to build financial products on crypto rails. Through the 0x APIs (offchain routing) and the 0x Protocol (onchain settlement via an open-source protocol), 0x connects Makers and Takers to facilitate the trading of digital assets. While Takers demand liquidity of digital assets on 0x, Makers are the parties that supply that liquidity. Onchain makers include AMMs and DEXs, while offchain makers are professional market makers that provide RFQ (Request-for-Quote) liquidity to 0x.
0x’s flagship product, Swap API, enables developers to deliver the best-executed price to users directly in their applications. It aggregates liquidity from 100+ sources, including decentralized exchanges (DEXs) and private market makers through the 0x RFQ, and its proprietary smart order routing. The best-executed price is different from the quoted price in that it is the best rate when the trade is realized, as opposed to the quoted rate subject to price slippage. Swap API is available on nine EVM-compatible blockchains including Ethereum, BNB Smart Chain (BSC), Polygon, Avalanche, Optimism, Fantom, Celo, Arbitrum, and Base.
The 0x platform also includes the 0x Dashboard, a developer experience tool with instant API keys, analytics, and monetization controls; Gasless API (rebranded from Tx Relay API), which enables developers to enhance user experience to reduce drop-offs in the trading process (available on Ethereum, Polygon, Base, Optimism, and Arbitrum); and Orderbook API, which enables developers to add limit orders to their DeFi applications (available on Ethereum, Polygon, and BSC). 0x’s products have been powering the backend processes for DeFi since it launched in 2017.
0x API volume declined in Q2 after two previous quarters of growth, falling to $5.3 billion, down 18% QoQ. While all categories declined in volume in real terms, the volume share of Other AMMs grew 20%, while those of all other categories declined QoQ. Other AMMs volume only fell ~1% QoQ, while all other categories fell at least 20%. Notably, SushiSwap volume fell 43% QoQ, and Uniswap V2 volume fell 62%.
Base’s share of 0x API volume more than doubled (+144% QoQ), while Ethereum’s share of volume stayed relatively steady (+3% QoQ) after Q1 marked its lowest volume share in the past year. Volume share of all other categories declined throughout the quarter: Arbitrum (-15%), BNB Smart Chain (-40%), Polygon (-43%), Optimism (-28%), and Other (-55%).
In Q2, 0x APIs experienced a 7% increase in daily unique traders. This lagged behind the top 10 aggregators and aggregators outside of the top 10, which grew 22% and 222%, respectively. While other aggregators grew the most, they averaged only 1,500 daily unique traders, roughly an order of magnitude less than the top 10 index, which averaged 12,400 while 0x API averaged 28,300. Throughout the quarter, Coinbase and MetaMask had the largest user bases connecting traders to 0x infrastructure. As market catalysts remain intact, 0x API usage may experience continued growth as the team continues to expand the product suite and increase application integrations.
Application Integrations
The close of Q2 marked 0x’s sixth consecutive quarter of growth in daily application integrations, averaging 119 per day (+3% QoQ). In Q1, integration growth led to transaction growth, with transactions processed by 0x APIs increasing 12% QoQ. The top four tagged applications driving trades through 0x APIs include Coinbase, Matcha, DefiLlama, and MetaMask.
RFQ Trades
Offchain liquidity is sourced from professional market makers via the 0x Request-for-Quote (RFQ) system. The RFQ system enables traders to request real-time quotes from market makers. Using the RFQ system, traders experience zero slippage, total protection from the risk of MEV attacks, and optimized trade execution. RFQ is best used on non-pegged pairs, including some of the most highly traded pairs such as USDC-WETH, USDT-WETH, USDC-WBTC, WBTC-WETH, and DAI-WETH.
Amid the decline in 0x API volume in Q2, RFQ volume on available pairs declined 19%, accounting for 43% of volume, an 11% decline QoQ. Simultaneously, non-RFQ volume was effectively flat, down less than 1% QoQ. The relative decline in RFQ volume compared to non-RFQ volume can likely be explained by an uptick in trading volume of pegged pairs in Q2. RFQ and non-RFQ trades on available pairs trended upwards at different paces, with RFQ trades increasing 24% QoQ and non-RFQ trades growing by 4%. This divergence highlights the volatility of the average trade size of both non-RFQ and RFQ volume. Also, RFQ trades accounted for 70% of total trades, up from 66% the previous quarter.
Qualitative Analysis
0x V2Following the close of Q2, 0x introduced its V2 pricing engine on July 15, 2024, which is concurrently in beta and available via Matcha, a DEX aggregator. Notable features and upgrades found in 0x V2 include:
Multiplex: Split a trade across multiple liquidity sources.
Multihop: Identifies intermediate “token steps” to access deeper liquidity.
A revamp of 0x’s RFQ system that provides offchain maker liquidity to 0x.
Improved gas estimation accuracy for prospective trades.
0x Settler (Permit2): Introduces single-use amount-based signatures for each transaction, removing outstanding approvals from the protocol, which could be exploited to steal funds in the event of a vulnerability.
New monetization controls that allow customers to specify which tokens to collect fees in, including both buy and sell tokens, as well as support to buy and sell.
In addition to these features and upgrades, 0x V2 also introduced a new form customers can fill out to receive coverage of new liquidity sources within days. It also added support for trading tokens with a transaction tax and clearer error codes for developers. 0x V2 smart contracts have received a total of four audits from three separate firms (Ourovoros, Trail of Bits, and OpenZeppelin).
Other Notable Updates
0x had a productive Q2 as it introduced new programs, reached new milestones, and promoted activity on partner applications.
DexKit integrated 0x’s Gasless API, allowing developers to build applications that offer users gasless swaps when they have insufficient gas.
Closing Summary
In Q2 both 0x API volume and RFQ volume on available pairs declined. Despite this, 0x had its sixth consecutive quarter of growth in daily application integrations and a QoQ increase in daily unique traders. With 0x V2’s introduction following the close of Q2 and amid the backdrop of a resurgent market, 0x is poised to accelerate protocol integrations and growth in volume and transactions.
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Matt is a Research Manager at Messari for the Protocol Reporting team. A generalist at heart, who's curious about anything and everything, and ultimately, on an adventure to find out what's true. He was an investigative reporter and multifamily/senior housing development associate before joining Messari in 2022.
Matt is a Research Manager at Messari for the Protocol Reporting team. A generalist at heart, who's curious about anything and everything, and ultimately, on an adventure to find out what's true. He was an investigative reporter and multifamily/senior housing development associate before joining Messari in 2022.
