The 0x Token Pops 67% Overnight as Coinbase Picks 0x Protocol for New NFT Platform. Should You Buy?

Coinbase will use 0x Protocol as the foundation for its NFT trading platform, causing the 0x token to soar during the past 24 hours.

Yesterday, Coinbase had a beta launch of its new non-fungible token (NFT) trading market as a direct competitor to NFT marketplace leader OpenSea. As part of the initial rollout, Coinbase has chosen the 0x Protocol as the underlying system to run the NFT platform, enabling royalties for NFT creators, lower transaction fees, as well as other benefits to both NFT collectors and designers.

As a result of this news, the 0x token -- pronounced "Zero-X" -- pumped as much as 67% overnight to a four-month price peak of $1.18. The price has since retraced to $1.02 at time of writing, according to CoinMarketCap.

A key reason for the 0x token's breathtaking price surge is largely due to the strong likelihood that Coinbase will soon become the dominant NFT trading platform with its 2.1 million waitlist of users and 8.8 million active monthly Coinbase users -- compared to roughly 489,000 monthly users for Opensea. Additionally, Coinbase is currently the largest U.S.-based cryptocurrency exchange with more than 56 million registered users and a stock market valuation of $65 billion. Given those factors, Coinbase is destined to be the dominant NFT trading player in the very near future.

Why did Coinbase pick 0x (Zero-X)?

The developers of both the 0x token and 0x Protocol -- 0x Labs -- issued their own statement about the Coinbase partnership. In that post, they explain that the 0x Protocol is the backbone for decentralized trading exchanges, and that it's the most trusted standard used to swap NFTs across many blockchains.

From the announcement:

"Building on 0x significantly reduces the effort required by Web3 developers and NFT marketplaces to deliver a seamless multi-chain experience to their users, giving them more time to focus on their products. 0x Protocol offers a wide range of creator-centric features and benefits that include:

• The most robust feature set of any NFT exchange protocol
• NFT swaps supporting all major token standards
• Free non-custodial listings + off-chain / on-chain ordering
• Transactional fees that are half of current fees
• Instant royalties for NFT creators
• A developer-first experience"

A key focus of Coinbase's announcement was that it wants to create a community among NFT creators and collectors to build excitement and adoption of NFTs in a highly interactive, social way, which is also a focus of 0x Labs.

"We're thrilled that Coinbase is using 0x to power their new social marketplace for NFTs and anticipate this launch will unlock a massive wave of new users into the blockchain space. We look forward to seeing many more apps and marketplaces take advantage of 0x Protocol's robust NFT swap feature set and industry-leading gas efficiency in the coming future," said Will Warren, Cofounder and Co-CEO of 0x Labs in the official statement.

What is 0x (ZRX) token and should you buy?

According to 0x Labs, its 0x Protocol is a decentralized exchange of tokens that runs on smart contracts -- different pockets of automated computer programming -- along the Ethereum blockchain. Conversely, its ZRX token is used for various incentive, treasury, and governance functions across the 0x protocol network. It's analogous to how the Ethereum blockchain has its own ETH coin -- the 0x Protocol has its own ZRX token.

As of this writing, the 0x token was still up about 45% on the day trading at $1.02 per token -- which is a 59% discount from its all-time high of $2.53 in Jan. 2018, with a current market cap of $840 million, according to CoinMarketCap.

This is not financial advice, and investors should always do their own research, investing only what they can afford to lose -- but the 0x token is worth serious consideration given its current "tokenomics" and the untapped potential of its partnership with Coinbase's NFT aspirations.