Canada Adopts International Crypto Tax Reporting Standard
Canada is aimed at having the OECD standard for crypto asset tax reporting in place by 2027, as agreed with 46 countries.
The 0x, or ‘zero exchange’, project is a protocol which allows ERC20 tokens to be exchanged on the Ethereum blockchain. 0x is not an app but rather an open public infrastructure. Its main purpose is to provide a completely decentralized exchange, removed from the flaws inherent to standard digital exchanges
To understand how the project achieves this, we must understand the different kinds of cryptocurrency exchange that exist.
Centralized cryptocurrency exchange
This type of exchange functions in a similar manner to standard fiat exchanges. The exchange acts as a third party responsible for the transfer of valuable assets between traders.
There are many flaws in this type of exchange. third parties are prone to hacking, mismanagement and may crash when there are spikes in trading volume. For example, the Coincheck heist which occurred earlier this year in January saw hackers steal over $530 million USD worth of cryptocurrency from the exchange.
These issues can be solved with decentralised exchanges.
Decentralized cryptocurrency exchange
A decentralized cryptocurrency exchange (DEX)leaves out the ‘middleman’ involved with regular exchanges. Trades occur instead on a shared digital ledger which is based on blockchain technology. Specifically, smart contracts act as the medium of exchange. Smart contracts refer to agreements written into code which are self-executable when the right conditions are met. Investors can submit what they are willing to trade onto the digital ledger and, if a second party agrees to the trade, a smart contract will enable the transaction. The smart contract essentially acts as the middleman itself.
While this is a step up from centralized exchanges, there are still a few issues. The transaction process can be very slow due to high traffic on the system. There is also the issue that it is still technically dependant on another entity to maintain the system and protocols.
0x acts as the next step forward by forming what can be called a modular trade network. They essentially remove the bulk of trading responsibility from the smart contracts and leave an open pool of protocols anyone can plug into.
To elaborate, users can utilize the open smart contracts to create their own orders and broadcast it via social media such as Twitter or Facebook. If another token owner sees and wants to conduct this trade order, they simply take it and use the 0x smart contract to finalize the trade. For example, if person A wants to trade their Bitcoin (BTC)for Dogecoins (DOGE), they may form a trade order and post it online. Person B sees this trade order and decides it is a good deal. From there, they take the order and use the 0x smart contract to accept it. The tokens are then removed and placed into each other’s respective wallets.
This system makes token trading more efficient than ever before and it is still developing. ZRX is an ERC20-based token, so any Ethereum-compatible wallet will support 0x.
0x’s Ethereum token – the ZRX – is used to offer decentralized control over 0x protocol’s upgrade system. This means that ZRX owners have authority, proportional to how much they own, on how the protocols can be developed over time.
The monetary value of the ZRX is currently at $0.843 per U.S. dollar, according to Coin Insider.