DDEX Leaves 0x Ecosystem, Expands Hydro Protocol

Last Friday, December 14, Tian Li of the decentralized exchange DDEX announced the company’s departure from 0x and move onto Hydro, a “new” protocol developed by the DDEX team. The public beta of Hydro launched today, and DDEX will officially stop using 0x as of January 9, 2019. Though Hydro was originally built as an incentive layer on top of 0x, its scope has since been expanded.

Li uses the term “fork” to describe the migration from 0x onto Hydro, as he wants to give credit to 0x, but the DDEX team has rewritten “a large portion of the codebase,” with plans to include a new order schema and a “fundamentally different” model for sharing liquidity, as well as to remove the ZRX token, among other changes. “[F]ee-based tokens create unnecessary friction,” Li continued.

Will Warren, co-founder and CEO of 0x, responded via Medium to DDEX’s decision to leave. In the post, he noted that the 0x team was disappointed yet understanding of the migration; however, they still believe “modularity and standardization will lead to greater innovation over time.” He elaborated:

“The DDEX team has communicated that Hydro protocol is intended to support pooling of liquidity between different matching relayers in a manner that is similar to R1 protocol. One of the benefits of the modular architecture offered by 0x v2.0 is that it makes it simple for developers to support this use case, among many others, with just a few lines of code.”

Further, Warren defended ZRX, noting that the long-term goal for the token is “to drive a governance process” for the 0x ecosystem, rather than cause friction as Li described.

Although forks are common in the cryptospace (remember Bitcoin Cash SV vs. Bitcoin Cash ABC?), 0x seems to be doubling down in response to DDEX’s departure. News of the migration comes after 0x released its relayer launch kit, promoted its token-purchasing service called 0x Instant, and announced its token grant program. Plus, 0x v2.0 debuted only a few months ago in September.

Regardless of DDEX’s decision, Warren maintains that 0x “will continue building towards a decentralized financial system that is more efficient, transparent, and equitable than any that has existed in the past.”