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What Are Concentrated Liquidity Market Makers (CLMMs)?
Key Takeaways
CLMMs allow liquidity providers to set specific price ranges for their assets instead of spreading them across all possible prices.
This model can offer better efficiency by concentrating funds where trading actually happens, meaning providers can earn more fees with the same amount of capital.
Unlike traditional models, CLMMs require users to watch the market more frequently. If the price leaves the custom set range, they stop earning fees.
While potential returns are higher, the risk of impermanent loss can also be greater if the market moves quickly against your position.
Introduction
In the early days of decentralized finance (DeFi), providing liquidity was mostly passive. You deposited your tokens into a liquidity pool, and the underlying smart contract spread your liquidity across every possible price. This model, known as the standard Automated Market Maker (AMM), was easy to use but not very efficient.
Imagine trying to sell water. In the standard AMM model, you would set up a shop on every single mile of a highway crossing the entire country, even in deserted areas where no one drives. Concentrated Liquidity Market Makers (CLMMs) changed this. They allow you to set up your "shops" only on the busy sections of the highway.
What Is Concentrated Liquidity?
In short, concentrated liquidity is liquidity that is allocated within a custom price range. In earlier versions of AMMs (like Uniswap V2), liquidity was distributed uniformly. This meant that a large portion of the assets in a pool was never actually used for trading, especially for stablecoin pairs where prices rarely move much.
With CLMMs (like Uniswap V3), you can choose to allocate your capital solely to a specific price interval. For example, providing liquidity for a stablecoin pair only between $0.99 and $1.01. This makes the liquidity "concentrated" around the current market price, where it’s most needed.
How Do CLMMs Work?
1. Ticks
To make custom ranges possible, CLMMs break down the price spectrum into small, distinct steps called ticks. You can think of ticks as the boundaries between different price areas. When you create a position, you choose a lower tick and an upper tick to serve as the borders for your liquidity.
2. Active liquidity
Your liquidity is only "active" when the current market price stays within the range you selected. As long as the price is inside your range, you earn trading fees.
However, if the price moves up or down and crosses your tick boundaries, your position becomes inactive. At this point, your liquidity is no longer earning fees.
3. Capital efficiency
The biggest benefit of CLMMs is capital efficiency. Because you aren't spreading your money across distant prices, you can provide less total capital to earn the same amount of fees as someone in a standard AMM.
For example, a user providing liquidity in a concentrated range might earn the same daily fees with $1,000 as a user in a traditional pool earns with $5,000, simply because the concentrated money is being utilized more effectively.
The Risks: It’s Not "Set and Forget"
While CLMMs offer better returns, they are more difficult to manage than standard AMMs.
Going out of range: If the price exits your chosen interval, your liquidity effectively converts into one of the two assets and sits idle. You stop earning fees until the price comes back or you manually move your position.
Impermanent loss: Because your liquidity is concentrated, the impact of price changes is amplified. If the market moves against you, you may experience impermanent loss much faster than in a standard pool.
Complexity: Standard AMM pools are easier to manage; you deposit and walk away. CLMMs require you to analyze the market and decide on a strategy. Some users even use game-theoretic strategies to optimize their positions, updating them frequently based on market movements.
Closing Thoughts
Concentrated Liquidity Market Makers have made DeFi markets deeper and more efficient. They allow traders to enjoy better prices and liquidity providers to earn higher yields on their assets. However, they transform liquidity provision from a passive income stream into an active investment strategy. If you are new to DeFi, consider starting with small amounts or simply stick to standard AMMs until you are comfortable with the concepts of CLMM ranges and ticks.
Further Reading
What Is an Automated Market Maker (AMM)?
Impermanent Loss Explained
What Are Liquidity Pools in DeFi?
Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Products mentioned in this article may not be available in your region. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.
CLMMs allow liquidity providers to set specific price ranges for their assets instead of spreading them across all possible prices.
This model can offer better efficiency by concentrating funds where trading actually happens, meaning providers can earn more fees with the same amount of capital.
Unlike traditional models, CLMMs require users to watch the market more frequently. If the price leaves the custom set range, they stop earning fees.
While potential returns are higher, the risk of impermanent loss can also be greater if the market moves quickly against your position.
Introduction
In the early days of decentralized finance (DeFi), providing liquidity was mostly passive. You deposited your tokens into a liquidity pool, and the underlying smart contract spread your liquidity across every possible price. This model, known as the standard Automated Market Maker (AMM), was easy to use but not very efficient.
Imagine trying to sell water. In the standard AMM model, you would set up a shop on every single mile of a highway crossing the entire country, even in deserted areas where no one drives. Concentrated Liquidity Market Makers (CLMMs) changed this. They allow you to set up your "shops" only on the busy sections of the highway.
What Is Concentrated Liquidity?
In short, concentrated liquidity is liquidity that is allocated within a custom price range. In earlier versions of AMMs (like Uniswap V2), liquidity was distributed uniformly. This meant that a large portion of the assets in a pool was never actually used for trading, especially for stablecoin pairs where prices rarely move much.
With CLMMs (like Uniswap V3), you can choose to allocate your capital solely to a specific price interval. For example, providing liquidity for a stablecoin pair only between $0.99 and $1.01. This makes the liquidity "concentrated" around the current market price, where it’s most needed.
How Do CLMMs Work?
1. Ticks
To make custom ranges possible, CLMMs break down the price spectrum into small, distinct steps called ticks. You can think of ticks as the boundaries between different price areas. When you create a position, you choose a lower tick and an upper tick to serve as the borders for your liquidity.
2. Active liquidity
Your liquidity is only "active" when the current market price stays within the range you selected. As long as the price is inside your range, you earn trading fees.
However, if the price moves up or down and crosses your tick boundaries, your position becomes inactive. At this point, your liquidity is no longer earning fees.
3. Capital efficiency
The biggest benefit of CLMMs is capital efficiency. Because you aren't spreading your money across distant prices, you can provide less total capital to earn the same amount of fees as someone in a standard AMM.
For example, a user providing liquidity in a concentrated range might earn the same daily fees with $1,000 as a user in a traditional pool earns with $5,000, simply because the concentrated money is being utilized more effectively.
The Risks: It’s Not "Set and Forget"
While CLMMs offer better returns, they are more difficult to manage than standard AMMs.
Going out of range: If the price exits your chosen interval, your liquidity effectively converts into one of the two assets and sits idle. You stop earning fees until the price comes back or you manually move your position.
Impermanent loss: Because your liquidity is concentrated, the impact of price changes is amplified. If the market moves against you, you may experience impermanent loss much faster than in a standard pool.
Complexity: Standard AMM pools are easier to manage; you deposit and walk away. CLMMs require you to analyze the market and decide on a strategy. Some users even use game-theoretic strategies to optimize their positions, updating them frequently based on market movements.
Closing Thoughts
Concentrated Liquidity Market Makers have made DeFi markets deeper and more efficient. They allow traders to enjoy better prices and liquidity providers to earn higher yields on their assets. However, they transform liquidity provision from a passive income stream into an active investment strategy. If you are new to DeFi, consider starting with small amounts or simply stick to standard AMMs until you are comfortable with the concepts of CLMM ranges and ticks.
Further Reading
What Is an Automated Market Maker (AMM)?
Impermanent Loss Explained
What Are Liquidity Pools in DeFi?
Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Products mentioned in this article may not be available in your region. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.
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Binance Academy
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What Is Zcash (ZEC)?
Key Takeaways
Zcash (ZEC) is a cryptocurrency forked from Bitcoin in 2016, designed to offer enhanced user privacy.
The network uses a technology called zk-SNARKs, which is a security protocol that allows transactions to be verified without revealing the sender, recipient, or amount.
Zcash uses the Equihash algorithm for mining, which differs from Bitcoin’s SHA-256, and is best mined using Application-Specific Integrated Circuits (ASICs).
Zcash uses a mining algorithm called Equihash. This is different from Bitcoin’s SHA-256, so miners need specific hardware to mine ZEC.
Introduction
Launched in 2016 by Zooko Wilcox O'Hearn and a group of scientists, Zcash began as a project called Zerocoin (later Zerocash). It was built as a hard fork of the Bitcoin codebase with a specific focus on security and anonymity, allowing users to shield their financial data from public view.
How Zcash Works: Privacy and zk-SNARKs
The core technology used by Zcash is a cryptographic tool known as zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge).
In a typical crypto transaction, the network confirms a payment by looking at the sender's address and the amount. It’s like writing a check where everyone can see the details.
In contrast, Zcash offers "shielded transactions,” so you are able to prove you have the money and that you sent it, without actually showing the details. The zk-SNARK technology is used to encrypt the information so the network can say "Yes, this is valid," but nobody else can see the sender, the receiver, or the amount. Still, if users want, they can also make their transactions public, just like Bitcoin.
Hashing algorithms
While Bitcoin uses the SHA-256 hashing algorithm for its Proof of Work (PoW) consensus mechanism, Zcash uses an algorithm called Equihash. This difference means that hardware and software designed for mining Bitcoin are incompatible with Zcash. Also, Zcash uses larger block sizes and different hashing times, aiming for a higher network hash rate.
How to Mine Zcash (ZEC)
Like Bitcoin, Zcash uses a PoW consensus mechanism. ZEC miners have to compete to solve cryptographic problems to produce new blocks and earn block rewards.
While it’s technically possible to mine Zcash coins using standard computers (with operating systems like Linux, Mac, or Docker), the network difficulty has increased significantly since its launch. So, mining ZEC with a personal computer is virtually impossible and rarely profitable.
To mine Zcash effectively, it is recommended to use:
ASIC miners: Application-Specific Integrated Circuits are hardware systems designed specifically for cryptocurrency mining.
Mining pools: By joining a mining pool, miners can combine their computing power to increase efficiency and the likelihood of earning rewards, which are shared proportionally among the pool members.
Who Runs Zcash?
Zcash was originally developed by the Electric Coin Company (ECC). In a move toward decentralization, the ECC transferred the trademark and licenses to the Zcash Foundation. By 2024, the ECC announced its intent to step back further, handing over governance decisions entirely to the Foundation.
However, Zcash’s privacy features also make it more concerning to governments and regulators. This has led to debates about the future adoption of ZEC and other privacy coins in a regulated global economy.
Grayscale Zcash ETF Application
In late 2025, Grayscale, a digital asset manager, submitted an application for a Zcash exchange-traded fund (ETF). If approved, the ETF would allow traditional investors to buy shares representing ZEC through their standard brokerage accounts, without needing to manage crypto wallets or private keys.
Closing Thoughts
Zcash is a crypto project focused on blockchain privacy that uses zk-SNARK technology. Its privacy technology allows people to keep their money transfers confidential without losing the ability to verify transactions.
Further Reading
What Is Bitcoin and How Does It Work?
zk-SNARKs and zk-STARKs Explained
Hard Forks and Soft Forks Explained
Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Products mentioned in this article may not be available in your region. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.
Zcash (ZEC) is a cryptocurrency forked from Bitcoin in 2016, designed to offer enhanced user privacy.
The network uses a technology called zk-SNARKs, which is a security protocol that allows transactions to be verified without revealing the sender, recipient, or amount.
Zcash uses the Equihash algorithm for mining, which differs from Bitcoin’s SHA-256, and is best mined using Application-Specific Integrated Circuits (ASICs).
Zcash uses a mining algorithm called Equihash. This is different from Bitcoin’s SHA-256, so miners need specific hardware to mine ZEC.
Introduction
Launched in 2016 by Zooko Wilcox O'Hearn and a group of scientists, Zcash began as a project called Zerocoin (later Zerocash). It was built as a hard fork of the Bitcoin codebase with a specific focus on security and anonymity, allowing users to shield their financial data from public view.
How Zcash Works: Privacy and zk-SNARKs
The core technology used by Zcash is a cryptographic tool known as zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge).
In a typical crypto transaction, the network confirms a payment by looking at the sender's address and the amount. It’s like writing a check where everyone can see the details.
In contrast, Zcash offers "shielded transactions,” so you are able to prove you have the money and that you sent it, without actually showing the details. The zk-SNARK technology is used to encrypt the information so the network can say "Yes, this is valid," but nobody else can see the sender, the receiver, or the amount. Still, if users want, they can also make their transactions public, just like Bitcoin.
Hashing algorithms
While Bitcoin uses the SHA-256 hashing algorithm for its Proof of Work (PoW) consensus mechanism, Zcash uses an algorithm called Equihash. This difference means that hardware and software designed for mining Bitcoin are incompatible with Zcash. Also, Zcash uses larger block sizes and different hashing times, aiming for a higher network hash rate.
How to Mine Zcash (ZEC)
Like Bitcoin, Zcash uses a PoW consensus mechanism. ZEC miners have to compete to solve cryptographic problems to produce new blocks and earn block rewards.
While it’s technically possible to mine Zcash coins using standard computers (with operating systems like Linux, Mac, or Docker), the network difficulty has increased significantly since its launch. So, mining ZEC with a personal computer is virtually impossible and rarely profitable.
To mine Zcash effectively, it is recommended to use:
ASIC miners: Application-Specific Integrated Circuits are hardware systems designed specifically for cryptocurrency mining.
Mining pools: By joining a mining pool, miners can combine their computing power to increase efficiency and the likelihood of earning rewards, which are shared proportionally among the pool members.
Who Runs Zcash?
Zcash was originally developed by the Electric Coin Company (ECC). In a move toward decentralization, the ECC transferred the trademark and licenses to the Zcash Foundation. By 2024, the ECC announced its intent to step back further, handing over governance decisions entirely to the Foundation.
However, Zcash’s privacy features also make it more concerning to governments and regulators. This has led to debates about the future adoption of ZEC and other privacy coins in a regulated global economy.
Grayscale Zcash ETF Application
In late 2025, Grayscale, a digital asset manager, submitted an application for a Zcash exchange-traded fund (ETF). If approved, the ETF would allow traditional investors to buy shares representing ZEC through their standard brokerage accounts, without needing to manage crypto wallets or private keys.
Closing Thoughts
Zcash is a crypto project focused on blockchain privacy that uses zk-SNARK technology. Its privacy technology allows people to keep their money transfers confidential without losing the ability to verify transactions.
Further Reading
What Is Bitcoin and How Does It Work?
zk-SNARKs and zk-STARKs Explained
Hard Forks and Soft Forks Explained
Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Products mentioned in this article may not be available in your region. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.
Binance is widely considered a safe platform for cryptocurrency trading, employing multi-layer security protocols including two-factor authentication, biometric verification, cold wallet storage for 90% of assets, and a $1 billion SAFU (Secure Asset Fund for Users) insurance fund.$
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Binance Academy
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What Is 0x Protocol?
Key Takeaways
The 0x Protocol is a decentralized infrastructure platform that enables peer-to-peer exchange of digital assets without intermediaries.
The platform combines off-chain order relay with on-chain settlement to improve efficiency and reduce gas costs.
Developers can use the 0x API suite to access combined liquidity sources and seamlessly integrate decentralized exchange features into their applications.
What Is 0x Protocol?
The 0x Protocol is a decentralized infrastructure platform that supports the peer-to-peer exchange of digital assets. Developed by 0x Labs, the protocol serves as an open standard for building applications that enable token trading without relying on centralized intermediaries.
The 0x Protocol provides an aggregated liquidity network and a suite of APIs that simplify the discovery, routing, and settlement of trades across different blockchains. The platform’s developer tools connect liquidity from multiple decentralized exchanges (DEXs) and market makers on EVM-compatible networks. This enables you to access competitive prices and facilitates the integration of decentralized exchange features into applications.
How 0x Protocol Works
The 0x Protocol uses a hybrid architecture that combines off-chain order management with on-chain settlement.
Off-chain order relay
The 0x Protocol keeps order creation and discovery off-chain to improve efficiency. A Maker creates an order that includes details such as the trading pair, price, amount, and expiration time.
The order is then signed with the Maker’s private key, confirming its authenticity without immediately broadcasting it to the blockchain. These signed orders are shared through the 0x relayer network, which helps reduce gas fees and limit on-chain congestion.
Relayer network
Relayers maintain off-chain order books and distribute available orders to potential traders. They act as marketplaces for liquidity discovery and can be independent platforms, wallet integrations, or components within trading applications.
Relayers never hold user funds, and they only facilitate order matching and earn fees for their services. All token swaps are executed through the protocol’s smart contracts.
On-chain settlement
When you fill an order as a Taker, the trade is settled on-chain through the 0x Settler contracts. The smart contract verifies the order’s signatures, checks its validity, and swaps assets between the Maker and Taker in a single transaction.
Each trade is atomic, meaning it either completes fully or not at all. This structure helps maintain security and transparency while reducing the number of on-chain operations.
The 0x swap process usually consists of the following steps:
Order creation: A Maker creates a 0x order in JSON format, specifying the trade details, including the token pair, price, and amount.
Maker signature: The Maker signs the order using their private key, cryptographically committing to the trade terms without broadcasting it on-chain.
Order sharing: The signed order is shared off-chain via relayers (who host order books) or sent directly to Takers who might fill the trade.
Aggregation: The 0x API collects and aggregates liquidity across multiple on-chain and off-chain sources to find the most efficient execution route and best price.
Order submission: The Taker selects the order, signs it, and submits it on-chain with the desired fill amount.
Settlement: The 0x Settler smart contract verifies both Maker and Taker signatures and performs an atomic swap of the assets, completing the trade securely on-chain.
The 0x API Suite
The Swap API
The Swap API enables developers to integrate token swaps into their applications with a single connection. It aggregates liquidity from multiple sources, including DEXs and private market makers, to find the best available price.
The API’s smart order routing system can split a single trade across multiple platforms to maximize returns. Once a route is chosen, the API returns a ready-to-sign Ethereum transaction, allowing you to execute trades quickly and securely.
The Gasless API
The Gasless API enables developers to offer gasless approvals and swaps, removing the need for users to hold native tokens for transaction fees. The API streamlines the trading process by automating approvals, allowances, and swaps. This helps prevent failed transactions caused by insufficient gas, making the user experience smoother for new Web3 users.
The Trade Analytics API
The Trade Analytics API provides developers with a clear view of all trades executed through the 0x Swap and Gasless APIs. The API organizes trading data into structured insights, helping teams understand how users interact with their apps and how trades perform over time. With this information, developers can make more informed product decisions, enhance user experience, and create more effective trading tools.
Use Cases
0x Protocol’s architecture and developer tools make it suitable for many applications across the Web3 ecosystem, including:
Exchanges and marketplaces: The protocol supports DEXs, NFT marketplaces, and over-the-counter (OTC) platforms by providing the underlying infrastructure for token swaps and order matching.
Wallets and interfaces: Crypto wallets, dashboards, and token screeners can integrate 0x APIs to offer seamless in-app swaps.
Data analytics: The 0x Trade Analytics API supports real-time dashboards and multi-chain analytics tools that visualize trading activity and liquidity trends.
Automation: AI agents, bots, and smart contract wallets can use 0x to automate on-chain transactions, from executing trades to managing portfolios.
Liquidity provision: Market makers and liquidity providers can connect to 0x through its APIs to contribute liquidity across on-chain order books and automated market makers (AMMs).
The ZRX Token
The ZRX token is the native token of the 0x Protocol, and it’s used within the ecosystem for multiple purposes, including:
Staking: Holders can stake ZRX with market makers to earn rewards, aligning incentives between liquidity providers and the protocol.
Governance: ZRX holders can participate in governance through the 0x DAO, voting on proposals related to upgrades, fees, and treasury management.
Network utility: ZRX can be used to pay trading fees to relayers, which are nodes that host order books and facilitate decentralized trading.
Closing Thoughts
The 0x Protocol acts as a foundational infrastructure for decentralized token trading, connecting liquidity across multiple networks through a unified framework. Its hybrid model, which combines off-chain order management with on-chain settlement, enhances efficiency while maintaining transparent and cost-effective transactions. Through its APIs for swaps, gasless transactions, and analytics, the protocol enables developers to build user-friendly decentralized finance (DeFi) applications.
Further Reading
What Is Cross-Chain Interoperability?
What’s the Difference Between a CEX and a DEX?
What Is a Trading API and Is It Worth It for Traders?
Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Products mentioned in this article may not be available in your region. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.
The 0x Protocol is a decentralized infrastructure platform that enables peer-to-peer exchange of digital assets without intermediaries.
The platform combines off-chain order relay with on-chain settlement to improve efficiency and reduce gas costs.
Developers can use the 0x API suite to access combined liquidity sources and seamlessly integrate decentralized exchange features into their applications.
What Is 0x Protocol?
The 0x Protocol is a decentralized infrastructure platform that supports the peer-to-peer exchange of digital assets. Developed by 0x Labs, the protocol serves as an open standard for building applications that enable token trading without relying on centralized intermediaries.
The 0x Protocol provides an aggregated liquidity network and a suite of APIs that simplify the discovery, routing, and settlement of trades across different blockchains. The platform’s developer tools connect liquidity from multiple decentralized exchanges (DEXs) and market makers on EVM-compatible networks. This enables you to access competitive prices and facilitates the integration of decentralized exchange features into applications.
How 0x Protocol Works
The 0x Protocol uses a hybrid architecture that combines off-chain order management with on-chain settlement.
Off-chain order relay
The 0x Protocol keeps order creation and discovery off-chain to improve efficiency. A Maker creates an order that includes details such as the trading pair, price, amount, and expiration time.
The order is then signed with the Maker’s private key, confirming its authenticity without immediately broadcasting it to the blockchain. These signed orders are shared through the 0x relayer network, which helps reduce gas fees and limit on-chain congestion.
Relayer network
Relayers maintain off-chain order books and distribute available orders to potential traders. They act as marketplaces for liquidity discovery and can be independent platforms, wallet integrations, or components within trading applications.
Relayers never hold user funds, and they only facilitate order matching and earn fees for their services. All token swaps are executed through the protocol’s smart contracts.
On-chain settlement
When you fill an order as a Taker, the trade is settled on-chain through the 0x Settler contracts. The smart contract verifies the order’s signatures, checks its validity, and swaps assets between the Maker and Taker in a single transaction.
Each trade is atomic, meaning it either completes fully or not at all. This structure helps maintain security and transparency while reducing the number of on-chain operations.
The 0x swap process usually consists of the following steps:
Order creation: A Maker creates a 0x order in JSON format, specifying the trade details, including the token pair, price, and amount.
Maker signature: The Maker signs the order using their private key, cryptographically committing to the trade terms without broadcasting it on-chain.
Order sharing: The signed order is shared off-chain via relayers (who host order books) or sent directly to Takers who might fill the trade.
Aggregation: The 0x API collects and aggregates liquidity across multiple on-chain and off-chain sources to find the most efficient execution route and best price.
Order submission: The Taker selects the order, signs it, and submits it on-chain with the desired fill amount.
Settlement: The 0x Settler smart contract verifies both Maker and Taker signatures and performs an atomic swap of the assets, completing the trade securely on-chain.
The 0x API Suite
The Swap API
The Swap API enables developers to integrate token swaps into their applications with a single connection. It aggregates liquidity from multiple sources, including DEXs and private market makers, to find the best available price.
The API’s smart order routing system can split a single trade across multiple platforms to maximize returns. Once a route is chosen, the API returns a ready-to-sign Ethereum transaction, allowing you to execute trades quickly and securely.
The Gasless API
The Gasless API enables developers to offer gasless approvals and swaps, removing the need for users to hold native tokens for transaction fees. The API streamlines the trading process by automating approvals, allowances, and swaps. This helps prevent failed transactions caused by insufficient gas, making the user experience smoother for new Web3 users.
The Trade Analytics API
The Trade Analytics API provides developers with a clear view of all trades executed through the 0x Swap and Gasless APIs. The API organizes trading data into structured insights, helping teams understand how users interact with their apps and how trades perform over time. With this information, developers can make more informed product decisions, enhance user experience, and create more effective trading tools.
Use Cases
0x Protocol’s architecture and developer tools make it suitable for many applications across the Web3 ecosystem, including:
Exchanges and marketplaces: The protocol supports DEXs, NFT marketplaces, and over-the-counter (OTC) platforms by providing the underlying infrastructure for token swaps and order matching.
Wallets and interfaces: Crypto wallets, dashboards, and token screeners can integrate 0x APIs to offer seamless in-app swaps.
Data analytics: The 0x Trade Analytics API supports real-time dashboards and multi-chain analytics tools that visualize trading activity and liquidity trends.
Automation: AI agents, bots, and smart contract wallets can use 0x to automate on-chain transactions, from executing trades to managing portfolios.
Liquidity provision: Market makers and liquidity providers can connect to 0x through its APIs to contribute liquidity across on-chain order books and automated market makers (AMMs).
The ZRX Token
The ZRX token is the native token of the 0x Protocol, and it’s used within the ecosystem for multiple purposes, including:
Staking: Holders can stake ZRX with market makers to earn rewards, aligning incentives between liquidity providers and the protocol.
Governance: ZRX holders can participate in governance through the 0x DAO, voting on proposals related to upgrades, fees, and treasury management.
Network utility: ZRX can be used to pay trading fees to relayers, which are nodes that host order books and facilitate decentralized trading.
Closing Thoughts
The 0x Protocol acts as a foundational infrastructure for decentralized token trading, connecting liquidity across multiple networks through a unified framework. Its hybrid model, which combines off-chain order management with on-chain settlement, enhances efficiency while maintaining transparent and cost-effective transactions. Through its APIs for swaps, gasless transactions, and analytics, the protocol enables developers to build user-friendly decentralized finance (DeFi) applications.
Further Reading
What Is Cross-Chain Interoperability?
What’s the Difference Between a CEX and a DEX?
What Is a Trading API and Is It Worth It for Traders?
Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Products mentioned in this article may not be available in your region. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.
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Binance Academy
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What Is Morpho (MORPHO)?
Key Takeaways
Morpho is a decentralized lending platform built on Ethereum and other EVM-compatible blockchains.
The protocol introduces a peer-to-peer lending layer on top of DeFi protocols, matching lenders and borrowers directly to enhance capital efficiency.
Morpho Markets enables users to create isolated lending markets with customizable parameters, including collateral type, loan asset, and interest rate model.
Morpho Vaults are curated vaults managed by third-party curators that optimize yield through diversified exposure to multiple Morpho Markets.
What Is Morpho?
Morpho is a decentralized, non-custodial lending protocol built on Ethereum and other EVM-compatible networks. The platform introduces a peer-to-peer lending layer on top of decentralized finance (DeFi) platforms, aiming to make lending and borrowing more efficient and accessible.
When you lend or borrow through Morpho, the protocol attempts to match you directly with a counterparty, rather than relying solely on pooled liquidity. This peer-to-peer approach helps reduce the spread between borrowing and lending rates, allowing capital to be used more efficiently.
If a match isn’t available, Morpho connects to integrated liquidity pools, allowing your funds to continue earning or providing yield. The platform also enables you to create your own lending markets or deposit assets into yield-optimizing vaults, providing flexible options for lending or borrowing while you maintain full control over your assets.
How Morpho Works
Morpho Markets
Morpho’s lending system operates through Morpho Markets, which are isolated environments pairing one collateral asset with one loan asset. These markets are permissionless, meaning you can create one by setting parameters such as the collateral type, liquidation threshold, and interest rate model.
Once a market is launched, its configuration can’t be changed, making its rules transparent for all participants. When you borrow through a Morpho Market, you deposit one asset as collateral and borrow another, up to the Liquidation Loan-to-Value (LLTV) ratio. If your collateral value falls and your position becomes risky, it may be liquidated to protect the system.
Morpho Vaults
Morpho Vaults enable you to participate in lending without directly managing positions. Each vault follows a strategy created by a curator and allocates deposits across selected Morpho Markets according to that strategy’s risk and return profile.
When you deposit assets such as ETH or USDC, you receive vault tokens that represent your share of the pool. The vault then lends those assets to borrowers and earns interest, which increases the value of your vault tokens over time. You can withdraw your funds at any point, receiving your assets plus any yield earned, minus applicable fees.
The lending process usually consists of the following steps:
Deposit assets: Supply tokens such as ETH or USDC into a Morpho Market or Vault. Deposited assets become available for borrowers or are allocated across multiple markets by the vault’s curator.
Match borrowers: Morpho’s peer-to-peer layer connects lenders and borrowers directly whenever possible. If no match is found, liquidity is supplied through integrated protocols, such as Aave or Compound.
Earn interest: Borrowers pay interest on their loans, and this yield is distributed to lenders or accumulated within vaults, increasing the value of deposited assets over time.
Monitor positions: Borrowers maintain their collateral ratio through a Health Factor, which measures safety from liquidation. Adding collateral or repaying debt helps maintain a healthy financial position.
Withdraw funds: Lenders can withdraw their deposits and yield at any time, while borrowers who have fully repaid their loans can reclaim their collateral once their position is cleared.
Key Features
Curators
Curators are independent managers who design each vault’s strategy. They decide how funds are distributed across markets and how to manage risk. Curators earn performance fees based on the returns they generate, aligning their incentives with those of depositors. Because vault creation is open to anyone, users can choose curators based on transparency, performance, and expertise.
Liquidation mechanism
Morpho uses an automated liquidation system to protect lenders. Each borrower’s position is monitored through a Health Factor that reflects its safety. When the Health Factor falls to 1 or below, the position becomes eligible for liquidation. Anyone can repay the borrower’s debt and receive the corresponding collateral plus a small reward. This mechanism keeps the protocol solvent and ensures fairness during volatile market conditions.
Bundlers
Bundlers simplify complex DeFi actions by allowing you to combine multiple steps into a single transaction. Instead of performing separate actions like depositing, borrowing, or swapping one at a time, you can bundle them together and execute everything at once.
For example, you can convert ETH to WETH (a wrapped version of ether), use it as collateral, and borrow USDC all in one step. This approach saves gas, reduces the chance of failed transactions, and makes interactions more efficient.
Risks and Considerations
Participation in Morpho comes with certain risks that both lenders and borrowers should consider. Morpho relies on smart contracts, which may contain vulnerabilities or bugs despite security audits. Price data on the platform is provided through oracles, and incorrect or manipulated feeds could lead to unwanted liquidations or bad debt.
Borrowers face liquidation risk if their loan-to-value ratio exceeds the market’s fixed Liquidation LLTV limit. Lenders, on the other hand, may experience bad debt if collateral values drop too quickly for liquidations to occur. Liquidity risk can also affect lenders if funds are temporarily unavailable for withdrawal during high market demand.
Morpho Vault users are exposed to curator risk, as vault performance depends on the curator’s management and strategy. There is also counterparty risk when lending or borrowing assets controlled by centralized entities, which could restrict access or impact withdrawals.
The MORPHO Token
The MORPHO token is the native governance token of the Morpho ecosystem, with a maximum supply of 1 billion tokens. MORPHO holders can participate in the Morpho DAO, a decentralized autonomous organization that oversees decisions on the protocol’s development and future direction.
The protocol uses a weighted voting system, giving greater influence to holders with more MORPHO tokens. Holders can propose or vote on protocol updates, while the token also helps incentivize network activity by encouraging lenders and borrowers to engage with the platform.
Morpho (MORPHO) on Binance HODLer Airdrops
On October 3, 2025, Binance announced MORPHO as the 49th project on the Binance HODLer Airdrops. Users who subscribed their BNB to Simple Earn and/or On-Chain Yields products from September 28 to 30 were eligible to receive MORPHO airdrops. A total of 6.5 million MORPHO tokens were allocated to the program, accounting for 0.65% of the total token supply.
MORPHO was listed with the Seed Tag applied, allowing for trading against the USDT, USDC, BNB, FDUSD, and TRY pairs.
Closing Thoughts
Morpho is a decentralized lending protocol that builds on top of existing DeFi platforms. Through features such as Morpho Markets, Vaults, and Bundlers, the protocol provides different ways for users and developers to engage with decentralized lending according to their needs and level of experience.
While these features make lending and borrowing more efficient and flexible, they also introduce potential risks. Issues such as smart contract vulnerabilities, market volatility, or forced liquidations can result in significant financial losses. It’s important to understand how Morpho operates, assess your own risk tolerance, and only commit funds you can afford to lose.
Further Reading
What Are Decentralized Derivatives and How Do They Work in DeFi?
What Are Funding Rates in Crypto Markets?
What Are DeFi Aggregators and How Do They Work?
Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Products mentioned in this article may not be available in your region. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.
Morpho is a decentralized lending platform built on Ethereum and other EVM-compatible blockchains.
The protocol introduces a peer-to-peer lending layer on top of DeFi protocols, matching lenders and borrowers directly to enhance capital efficiency.
Morpho Markets enables users to create isolated lending markets with customizable parameters, including collateral type, loan asset, and interest rate model.
Morpho Vaults are curated vaults managed by third-party curators that optimize yield through diversified exposure to multiple Morpho Markets.
What Is Morpho?
Morpho is a decentralized, non-custodial lending protocol built on Ethereum and other EVM-compatible networks. The platform introduces a peer-to-peer lending layer on top of decentralized finance (DeFi) platforms, aiming to make lending and borrowing more efficient and accessible.
When you lend or borrow through Morpho, the protocol attempts to match you directly with a counterparty, rather than relying solely on pooled liquidity. This peer-to-peer approach helps reduce the spread between borrowing and lending rates, allowing capital to be used more efficiently.
If a match isn’t available, Morpho connects to integrated liquidity pools, allowing your funds to continue earning or providing yield. The platform also enables you to create your own lending markets or deposit assets into yield-optimizing vaults, providing flexible options for lending or borrowing while you maintain full control over your assets.
How Morpho Works
Morpho Markets
Morpho’s lending system operates through Morpho Markets, which are isolated environments pairing one collateral asset with one loan asset. These markets are permissionless, meaning you can create one by setting parameters such as the collateral type, liquidation threshold, and interest rate model.
Once a market is launched, its configuration can’t be changed, making its rules transparent for all participants. When you borrow through a Morpho Market, you deposit one asset as collateral and borrow another, up to the Liquidation Loan-to-Value (LLTV) ratio. If your collateral value falls and your position becomes risky, it may be liquidated to protect the system.
Morpho Vaults
Morpho Vaults enable you to participate in lending without directly managing positions. Each vault follows a strategy created by a curator and allocates deposits across selected Morpho Markets according to that strategy’s risk and return profile.
When you deposit assets such as ETH or USDC, you receive vault tokens that represent your share of the pool. The vault then lends those assets to borrowers and earns interest, which increases the value of your vault tokens over time. You can withdraw your funds at any point, receiving your assets plus any yield earned, minus applicable fees.
The lending process usually consists of the following steps:
Deposit assets: Supply tokens such as ETH or USDC into a Morpho Market or Vault. Deposited assets become available for borrowers or are allocated across multiple markets by the vault’s curator.
Match borrowers: Morpho’s peer-to-peer layer connects lenders and borrowers directly whenever possible. If no match is found, liquidity is supplied through integrated protocols, such as Aave or Compound.
Earn interest: Borrowers pay interest on their loans, and this yield is distributed to lenders or accumulated within vaults, increasing the value of deposited assets over time.
Monitor positions: Borrowers maintain their collateral ratio through a Health Factor, which measures safety from liquidation. Adding collateral or repaying debt helps maintain a healthy financial position.
Withdraw funds: Lenders can withdraw their deposits and yield at any time, while borrowers who have fully repaid their loans can reclaim their collateral once their position is cleared.
Key Features
Curators
Curators are independent managers who design each vault’s strategy. They decide how funds are distributed across markets and how to manage risk. Curators earn performance fees based on the returns they generate, aligning their incentives with those of depositors. Because vault creation is open to anyone, users can choose curators based on transparency, performance, and expertise.
Liquidation mechanism
Morpho uses an automated liquidation system to protect lenders. Each borrower’s position is monitored through a Health Factor that reflects its safety. When the Health Factor falls to 1 or below, the position becomes eligible for liquidation. Anyone can repay the borrower’s debt and receive the corresponding collateral plus a small reward. This mechanism keeps the protocol solvent and ensures fairness during volatile market conditions.
Bundlers
Bundlers simplify complex DeFi actions by allowing you to combine multiple steps into a single transaction. Instead of performing separate actions like depositing, borrowing, or swapping one at a time, you can bundle them together and execute everything at once.
For example, you can convert ETH to WETH (a wrapped version of ether), use it as collateral, and borrow USDC all in one step. This approach saves gas, reduces the chance of failed transactions, and makes interactions more efficient.
Risks and Considerations
Participation in Morpho comes with certain risks that both lenders and borrowers should consider. Morpho relies on smart contracts, which may contain vulnerabilities or bugs despite security audits. Price data on the platform is provided through oracles, and incorrect or manipulated feeds could lead to unwanted liquidations or bad debt.
Borrowers face liquidation risk if their loan-to-value ratio exceeds the market’s fixed Liquidation LLTV limit. Lenders, on the other hand, may experience bad debt if collateral values drop too quickly for liquidations to occur. Liquidity risk can also affect lenders if funds are temporarily unavailable for withdrawal during high market demand.
Morpho Vault users are exposed to curator risk, as vault performance depends on the curator’s management and strategy. There is also counterparty risk when lending or borrowing assets controlled by centralized entities, which could restrict access or impact withdrawals.
The MORPHO Token
The MORPHO token is the native governance token of the Morpho ecosystem, with a maximum supply of 1 billion tokens. MORPHO holders can participate in the Morpho DAO, a decentralized autonomous organization that oversees decisions on the protocol’s development and future direction.
The protocol uses a weighted voting system, giving greater influence to holders with more MORPHO tokens. Holders can propose or vote on protocol updates, while the token also helps incentivize network activity by encouraging lenders and borrowers to engage with the platform.
Morpho (MORPHO) on Binance HODLer Airdrops
On October 3, 2025, Binance announced MORPHO as the 49th project on the Binance HODLer Airdrops. Users who subscribed their BNB to Simple Earn and/or On-Chain Yields products from September 28 to 30 were eligible to receive MORPHO airdrops. A total of 6.5 million MORPHO tokens were allocated to the program, accounting for 0.65% of the total token supply.
MORPHO was listed with the Seed Tag applied, allowing for trading against the USDT, USDC, BNB, FDUSD, and TRY pairs.
Closing Thoughts
Morpho is a decentralized lending protocol that builds on top of existing DeFi platforms. Through features such as Morpho Markets, Vaults, and Bundlers, the protocol provides different ways for users and developers to engage with decentralized lending according to their needs and level of experience.
While these features make lending and borrowing more efficient and flexible, they also introduce potential risks. Issues such as smart contract vulnerabilities, market volatility, or forced liquidations can result in significant financial losses. It’s important to understand how Morpho operates, assess your own risk tolerance, and only commit funds you can afford to lose.
Further Reading
What Are Decentralized Derivatives and How Do They Work in DeFi?
What Are Funding Rates in Crypto Markets?
What Are DeFi Aggregators and How Do They Work?
Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Products mentioned in this article may not be available in your region. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.
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Binance Academy
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What Is DoubleZero (2Z)?
Key Takeaways
DoubleZero is a decentralized network designed to enhance the connection and data sharing between blockchains and distributed systems.
The platform uses dedicated fiber-optic links and hardware contributed by individuals and organizations, turning unused infrastructure into a high-performance global network.
Contributors set up DoubleZero Devices (DZDs) and run the DoubleZero software to provide services like routing, filtration, and data processing.
2Z is the network’s native token. It’s used to reward contributors, pay for bandwidth and optimized routing, and participate in governance.
What Is DoubleZero?
DoubleZero is a decentralized connectivity network designed to enhance the communication between blockchains and distributed systems. The platform consists of connections contributed by participants worldwide to create a stable and scalable communication layer.
To join the network, contributors deploy DoubleZero Devices (DZDs) in data centers. These devices manage routing, traffic flow, and data processing, and are linked through DoubleZero Exchanges (DZXs) located in major hubs. Together, they form a global mesh of high-performance links designed to support reliable and consistent connectivity.
By contributing to the network, you can earn 2Z tokens when your connections improve speed and reliability. At the same time, blockchain validators and applications benefit from faster communication, fewer delays, and more dependable performance.
How DoubleZero Works
Bandwidth contributions
Contributors on the network provide dedicated fiber-optic bandwidth between two data centers. At each endpoint, they install DoubleZero Devices (DZDs), which are pieces of hardware that connect their link to the network.
These devices run DoubleZero’s software, which prepares the link for participation. Once the setup is confirmed through smart contracts, the connection is officially added to the DoubleZero network and becomes part of its global system.
Network integration
Individual links are connected together through DoubleZero Exchanges (DZXs). These exchanges serve as hubs in major cities, where the connections of different contributors converge and are woven into the broader network.
By joining through a DZX, each link becomes part of a continuous global network. The system’s controllers automatically configure the devices so data can move smoothly across different paths. This process allows DoubleZero to operate as a coordinated network rather than a set of isolated links.
Smart contracts
All contributions are managed through smart contracts, which act as automated agreements on the blockchain. These contracts handle tasks like verifying new connections, recording usage, and distributing rewards. Contributors are paid in 2Z tokens when their links improve the network’s overall performance. Additional participants, known as resource contributors, help keep the system running by monitoring activity and publishing data on link quality.
Key Features
Dedicated bandwidth
When you connect to DoubleZero, you use bandwidth from dedicated fiber-optic links instead of relying on the public internet. These links are committed and measured, which means your applications can operate on more predictable and consistent connections. For systems like blockchains, this helps reduce the uncertainty that often comes with internet-based routing.
Edge filtration
As data passes through DoubleZero, it is filtered at the edge of the network. DoubleZero Devices (DZDs) remove duplicate or unnecessary traffic before it reaches validator node operators or infrastructure providers. By reducing this overhead, they can allocate more resources to other functions, such as block validation, transaction processing, and infrastructure management.
Optimized routing
When you send messages through DoubleZero, they follow routes that are optimized for speed and reliability. This can reduce latency and jitter compared to the public internet. For you, this means that data reaches its destination more quickly and consistently, which is particularly valuable in distributed systems where timing plays a crucial role.
Incentive model
If you contribute bandwidth or computational resources, you can earn rewards in 2Z tokens. These rewards are tied to measurable improvements in performance, such as reducing latency or increasing throughput. This means you are compensated based on the quality of your contribution, while applications and infrastructure providers benefit from a stronger and more efficient network.
The 2Z Token
2Z is the native token of the DoubleZero protocol, issued on the Solana blockchain as an SPL token. It’s used within the ecosystem for many purposes, including:
Network access: Users can pay with 2Z to access DoubleZero’s dedicated connectivity services. In some cases, payments may be made in Solana’s native token, SOL, or other supported assets, which are then converted into 2Z.
Rewards: Providers can earn 2Z tokens for contributing computational power, security, and fiber optic infrastructure. Payouts are performance-based, with rewards given only when resources add value and exceed the baseline of the public internet.
Staking: 2Z holders will be able to stake or delegate their tokens to resource providers, reinforcing network security while earning rewards.
DoubleZero (2Z) on Binance HODLer Airdrops
On October 2, 2025, Binance announced 2Z as the 48th project on the Binance HODLer Airdrops. Users who subscribed their BNB to Simple Earn and/or On-Chain Yields products from September 26 to 28 were eligible to receive 2Z airdrops. A total of 35 million 2Z tokens were allocated to the program, accounting for 0.35% of the total token supply.
2Z was listed with the Seed Tag applied, allowing for trading against the USDT, USDC, BNB, FDUSD, and TRY pairs.
Closing Thoughts
DoubleZero is a decentralized network that focuses on enhancing the connection and data sharing between blockchains and distributed systems. The platform connects dedicated bandwidth, devices, and hubs into a network of optimized links that is designed to provide more predictable performance than typical internet routing. For contributors, the network provides a way to utilize idle capacity, while for applications, it offers more stable and efficient data transmission.
Further Reading
What Is Data Availability?
What Is DePIN in Crypto?
What Are Internet Capital Markets (ICM)?
Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Products mentioned in this article may not be available in your region. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.
DoubleZero is a decentralized network designed to enhance the connection and data sharing between blockchains and distributed systems.
The platform uses dedicated fiber-optic links and hardware contributed by individuals and organizations, turning unused infrastructure into a high-performance global network.
Contributors set up DoubleZero Devices (DZDs) and run the DoubleZero software to provide services like routing, filtration, and data processing.
2Z is the network’s native token. It’s used to reward contributors, pay for bandwidth and optimized routing, and participate in governance.
What Is DoubleZero?
DoubleZero is a decentralized connectivity network designed to enhance the communication between blockchains and distributed systems. The platform consists of connections contributed by participants worldwide to create a stable and scalable communication layer.
To join the network, contributors deploy DoubleZero Devices (DZDs) in data centers. These devices manage routing, traffic flow, and data processing, and are linked through DoubleZero Exchanges (DZXs) located in major hubs. Together, they form a global mesh of high-performance links designed to support reliable and consistent connectivity.
By contributing to the network, you can earn 2Z tokens when your connections improve speed and reliability. At the same time, blockchain validators and applications benefit from faster communication, fewer delays, and more dependable performance.
How DoubleZero Works
Bandwidth contributions
Contributors on the network provide dedicated fiber-optic bandwidth between two data centers. At each endpoint, they install DoubleZero Devices (DZDs), which are pieces of hardware that connect their link to the network.
These devices run DoubleZero’s software, which prepares the link for participation. Once the setup is confirmed through smart contracts, the connection is officially added to the DoubleZero network and becomes part of its global system.
Network integration
Individual links are connected together through DoubleZero Exchanges (DZXs). These exchanges serve as hubs in major cities, where the connections of different contributors converge and are woven into the broader network.
By joining through a DZX, each link becomes part of a continuous global network. The system’s controllers automatically configure the devices so data can move smoothly across different paths. This process allows DoubleZero to operate as a coordinated network rather than a set of isolated links.
Smart contracts
All contributions are managed through smart contracts, which act as automated agreements on the blockchain. These contracts handle tasks like verifying new connections, recording usage, and distributing rewards. Contributors are paid in 2Z tokens when their links improve the network’s overall performance. Additional participants, known as resource contributors, help keep the system running by monitoring activity and publishing data on link quality.
Key Features
Dedicated bandwidth
When you connect to DoubleZero, you use bandwidth from dedicated fiber-optic links instead of relying on the public internet. These links are committed and measured, which means your applications can operate on more predictable and consistent connections. For systems like blockchains, this helps reduce the uncertainty that often comes with internet-based routing.
Edge filtration
As data passes through DoubleZero, it is filtered at the edge of the network. DoubleZero Devices (DZDs) remove duplicate or unnecessary traffic before it reaches validator node operators or infrastructure providers. By reducing this overhead, they can allocate more resources to other functions, such as block validation, transaction processing, and infrastructure management.
Optimized routing
When you send messages through DoubleZero, they follow routes that are optimized for speed and reliability. This can reduce latency and jitter compared to the public internet. For you, this means that data reaches its destination more quickly and consistently, which is particularly valuable in distributed systems where timing plays a crucial role.
Incentive model
If you contribute bandwidth or computational resources, you can earn rewards in 2Z tokens. These rewards are tied to measurable improvements in performance, such as reducing latency or increasing throughput. This means you are compensated based on the quality of your contribution, while applications and infrastructure providers benefit from a stronger and more efficient network.
The 2Z Token
2Z is the native token of the DoubleZero protocol, issued on the Solana blockchain as an SPL token. It’s used within the ecosystem for many purposes, including:
Network access: Users can pay with 2Z to access DoubleZero’s dedicated connectivity services. In some cases, payments may be made in Solana’s native token, SOL, or other supported assets, which are then converted into 2Z.
Rewards: Providers can earn 2Z tokens for contributing computational power, security, and fiber optic infrastructure. Payouts are performance-based, with rewards given only when resources add value and exceed the baseline of the public internet.
Staking: 2Z holders will be able to stake or delegate their tokens to resource providers, reinforcing network security while earning rewards.
DoubleZero (2Z) on Binance HODLer Airdrops
On October 2, 2025, Binance announced 2Z as the 48th project on the Binance HODLer Airdrops. Users who subscribed their BNB to Simple Earn and/or On-Chain Yields products from September 26 to 28 were eligible to receive 2Z airdrops. A total of 35 million 2Z tokens were allocated to the program, accounting for 0.35% of the total token supply.
2Z was listed with the Seed Tag applied, allowing for trading against the USDT, USDC, BNB, FDUSD, and TRY pairs.
Closing Thoughts
DoubleZero is a decentralized network that focuses on enhancing the connection and data sharing between blockchains and distributed systems. The platform connects dedicated bandwidth, devices, and hubs into a network of optimized links that is designed to provide more predictable performance than typical internet routing. For contributors, the network provides a way to utilize idle capacity, while for applications, it offers more stable and efficient data transmission.
Further Reading
What Is Data Availability?
What Is DePIN in Crypto?
What Are Internet Capital Markets (ICM)?
Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Products mentioned in this article may not be available in your region. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.
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From launching in 2017 to becoming one of the world's leading crypto exchanges, it's been an incredible journey. Here's to innovation, community, and shaping the future of Web3! 🚀
#BinanceTurns8 #CryptoAnniversary #Web3
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