Opportunities:
The problems that 0x is trying to solve benefit from decentralization. The risks pertaining to centralized exchange are some of the biggest factors preventing the wide adoption of cryptocurrency. The hacks at different exchanges are some of the biggest news that layman learn about cryptocurrencies and this is undesirable.
Network effect is in place for this project. The more usage the 0x protocol (exchanges) has, the more valuable ZRX is. This is because investors prefer exchanges with heavy volume and lower bid/ask spread.
ICO is a new trend that is gaining popularity very quickly. In July 2017 alone, $665 million was raised – that is twice as much money as was raised in the first five months of the year combined.
Among different ICO platforms, Ethereum is by far the most popular one. According to Coinmarketcap, 69 out of the 100 most valuable tokens are using the Ethereum platform.
0x has already secured partnerships with promising projects including Ethfinex, District0x, Augur, and Melonport, among others.
The partnerships with established companies such as Bitfinex (for their Ethfinex spinoff) and ANX International (for their OpenANX spinoff) are especially exciting.
Bitfinex is one of the largest cryptocurrency exchange in the world, with trading volume in the past 24 hours reaching $250 million. If Ethfinex is remotely close to the scale of Bitfinex, ZRX will be receiving heavy usage from this exchange alone.
Bitfinex is starting to dabble into token trading with the addition of Santiment and Omise GO recently. It looks like the Ethfinex project is the next focus of Bitfinex.
Multiple blockchain-focused venture capital firms have invested in 0x, meaning that the project has already passed due diligence of those institutional investors.
Concerns:
SEC regulations may have restrictions on exchanges operating in the US / for US citizens, potentially limiting the usage of 0x as certain ERC20 tokens are considered to be securities.
0x only works for ERC20 tokens. If another smart contract protocol overtakes Ethereum in fund raising popularity, there may not be much demand for ZRX going forward.
It is not clear if 0x will apply to list their tokens on any exchanges. If they don't, then the only exchanges that will list ZRX probably going to be smaller exchanges such as Etherdelta or Liqui.
Conclusion:
Overall, I like this ICO both for short- and long-term potential. The project, team, progress, and execution all look to be promising.
Aside from its investment merit, I am also rooting for 0x’s success because the project moves Ethereum forward as the leader of tokens and smart contracts.
Our thoughts of the tokens for short term and long term are as follows:
For short-term holding:
Good because 1) the market environment is improving so it looks very likely that the $24 million hard cap will be reached, 2) the partnership with Ethfinex really helped the exposure of 0x, and 3) tokens will be distributed immediately after contribution.
For long-term holding:
Good because 1) ZRX will have fairly strong demand right out of the gate with the partnership with Ethfinex, 2) I believe the prevalence of tokens is just getting started – in 5 to 10 years, the market could be orders of magnitude bigger than what it is now, 3) it looks like 0x’s protocol is better than the existing solutions, either in the centralized or decentralized space.
