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0x Q1 2024 Brief

Validated Project

From Messari by Micah Casella

Key Insights

  • 0x’s API consumption volume increased 73% QoQ, growing to $6.5 billion in Q1. Simultaneously, it experienced a 70% increase in transactions.
  • 0x’s daily average unique traders grew by 72% QoQ, averaging 25,400 daily unique traders.
  • 0x daily application integrations grew to a record 116, up 24% QoQ.
  • 0x expanded its Gasless API to Base, Optimism, and Arbitrum, in addition to Ethereum and Polygon. The feature enables developers to embed gasless trading and MEV protection into their applications.
  • 0x launched a Trade Analytics dashboard, enabling developers to analyze user trends and gain marketing and strategy insights from onchain activity.

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.

Website / X (Twitter) / Discord

Key Metrics

Performance Analysis

Volume and Trades

0x API volume grew for the second consecutive quarter, reaching $6.5 billion, up 73% QoQ. RFQ trades continued to grow, as a percentage of volume as 0x’s Gasless API expanded to Base, Optimism, and Arbitrum. The Gasless API ensures protection from MEV, more reliable transactions, and smoother interactions. It also facilitates gasless transactions, a new feature that enables applications to build products where traders can cover gas fees with traded tokens instead of native tokens. Implementations of the Gasless API, such as on Coinbase and Robinhood, help route more traffic through 0x APIs, contributing to its volume increase.

Ethereum’s share of 0x API volume dropped to 69%, its lowest quarterly level in a year. The largest gainers in Q1 volume share were Base (+3.2%), Arbitrum (+2.6%), and BNB Smart Chain (+2.2%). While only Base experienced a QoQ change greater than 2% (+3.1%), the budding rollup accounted for the most trades in the final week of the quarter. Base processed 26% of trades, Polygon processed 25%, and Ethereum 21%. This jump in Base’s activity may be attributed to increased memecoin trading and anticipation of Coinbase’s Smart Wallet which will simplify user interactions with Base.

DEX aggregators and liquidity providers experienced impressive growth in Q1. As the top 10 aggregators (outside of 0x) grew daily unique traders by 49%, 0x APIs experienced a 72% increase in daily unique traders. While other aggregators outside the top 10 grew usage by 192%, they averaged only 465 daily unique traders, paling in comparison to the 8,400 that the top 10 index averages and the 25,400 that 0x APIs average. Throughout the quarter, Coinbase and LI.FI had the largest user bases connecting traders to 0x infrastructure. As the market cycle continues in an optimistic direction, 0x APIs may experience more outsized, significant growth as it continues expanding its product suite and integrations into new applications.

Application Integrations

0x achieved five consecutive quarters of growth in daily application integrations, averaging 116 applications per day in Q1, up 24% QoQ. Integration growth has contributed to the growth in transactions processed by 0x APIs over the last six months. In Q1, transactions increased by 70% QoQ. The top four tagged applications driving trades through 0x APIs include Coinbase, LI.FI, Matcha, and MetaMask.

RFQ Trades

On 0x, 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 utilized 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.

RFQ volume on available pairs jumped 83% QoQ, accounting for 48% of the respective volume. Simultaneously, non-RFQ volume only grew by 19% QoQ. RFQ and non-RFQ trades on available pairs experienced a different dynamic, with RFQ trades increasing by 60% QoQ and non-RFQ trades growing by 87%. Regardless, RFQ trades still accounted for 66% of total trades. While a portion of this growth can be attributed to the current market cycle, 0x also continues to ship new products and expand to various chains.

Qualitative Analysis

0x had a productive Q1 as it shipped new developments focused on integrations and product releases.

Gasless Swaps

0x introduced gasless swaps at the end of January 2024, enabling developers to provide this feature via 0x’s Gasless API. The core aspects of this feature are described below.

  • This update removes the barrier of requiring users to hold native assets, enabling them to trade with any asset in their wallets. Under the hood, 0x takes a portion of the user’s trade to cover costs, abstracting requests for approvals and network fees from the UX.
  • Composable with Swap API to lower the rate of failed transactions and quicken trade confirmations by simulating transactions before submitting them. It also stops transactions that would likely fail and adjusts gas fees for quicker confirmations.
  • Can also access Swap API’s RFQ liquidity and smart order routing to eliminate MEV while obtaining the best price for users.

Trade Analytics

0x launched its Trade Analytics dashboard in mid-March 2024, enabling paid subscribers to track various metrics related to their user trading behavior through 0x APIs. The core aspects of this product are described below.

  • Trade Analytics is a dashboard that shows charts and insights into the onchain activity of a subscriber’s (developer’s) application that utilizes 0x APIs.
  • With 12-month views, developers can analyze trading data and filter by API, chain, and time period. Developers can also see how marketing campaigns, product releases, and other events impacted volume, users, and trades.
  • Developers can track revenue to determine which products are most impactful and to organize their financial records.

Notable Integrations

  • Phuture Finance integrated 0x APIs into its core product to expand access to liquidity across multiple blockchains.
  • Coinbase Wallet integrated 0x’s Gasless API into its swap function, switching users to gasless swaps when they have insufficient gas.
  • 0x expanded support of the Gasless API to Arbitrum, Base, and Optimism.

Closing Summary

Compounding the market's growth, 0x released new products and expanded integrations in Q1. Through its Gasless API, 0x expanded its gasless swap product to Base, Optimism, and Arbitrum. Throughout the quarter, 0x APIs experienced QoQ growth in volume (+73%), transactions (+70%), daily unique traders (+72%), and application integrations (+24%). Already prevalent in many top protocols, 0x is primed to continue expanding to new projects while taking advantage of optimistic market conditions.

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