Core functions of the 0x protocol consist of a message format and smart contracts.
- Message format
It is simply a packet of data containing order parameters such as what token you want to trade, the price you want to trade, at what expiration time, and also a counterparty address if you wish to trade with him/her specifically.
- Smart contracts
Firstly, market makers specify their trade parameters into a message format and “sign” on the 0x smart contract. Then users or takers can fill that order by sending it to the 0x smart contract to process the trade and swap the tokens.
“Relayers” facilitate this process where they keep signed orders from market makers. This significantly reduces costs as described in the above section and 0x called it “off-chain order relay, the on-chain settlement”. Relayers are allowed to charge fees in ZRX (0x’s token) on the completed trades.
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