Polkadex has become popular in the crypto market as there are many features associated with it. Polkadex is a fully decentralized, peer-to-peer order book-based cryptocurrency exchange for the Defi ecosystem. With Polkadex, the user gets the same trading functionality and performance of a centralized exchange, but with the added benefits of better user-experience and fully decentralized security.
The Polkadex trading platform runs on the Substrate framework. It merges the Market Making Pool (AMM), which is most common in decentralized exchanges (DEXs), with the orderbook model used by the centralized exchanges, allowing AMM pools to interact with an orderbook.
There is a growing demand in the crypto community for a change in the way we can all trade our assets, and Polkadex offers us the solution. Polkadex is bringing you the trading functionality and performance of a centralized exchange, but with a better user-experience and fully decentralized security. When it comes to decentralized security, we are innovating in four core areas:
- Customer Experience
- Execution Speed of Trades
- Custody of assets
With Polkadex, the user will not have to worry about a delay in the execution of their orders, or the typical user interface problems characteristic of some DEXs. Polkadex tries to solve these basic fundamentals of any commercial platform but focuses on the custody and security of user assets with the power of decentralization under Blockchain technology.
Since Polkadex is building a decentralized network using the Substrate Blockchain, this trading experience has a Centralized feel which makes it different from other DEXs. They tend to solve the problems of the crypto community by giving a smooth and slick interface that matches any centralized solution out there. Both the beginner and even the experienced traders will have a full range of trading experience at Polkadex.
To reduce the complexity of the chain, Polkadex focuses on different blockchain designs which will also improve the customer experience and increase the throughput as well.
Different models and tools have been classified into two criteria:
- On-chain: Features like Order-book user balance verification, On-chain market-making tools, Bridge mechanism, and Trader Assets Management go on-chain.
- Off-chain: features like trade execution, market data aggregation, storage and retrieval of trade history, and technical analysis indicators stay off-chain.
The Substrate framework enables the creation of application-specific, composable, and interoperable blockchains. Due to this, developers do not need to deal with the complexity of blockchain production and consensus. Building decentralized applications also need a modular structure.
Benefits over other DEXs
Once live, the Polkadex platform will be the fastest of them all. Through a combination of off-chain execution and on-chain verifiability, it is planning to overcome the throughput and latency issues faced by market makers, and trading bots who are looking for sub-second latency to gain optimal performance.
In order to solve the problem of low liquidity, Polkadex connects a liquidity pool directly to their trading engine The engine will call on the liquidity pool to make use of the liquidity against the order book. The liquidity providers will be incentivized with a Perpetual Liquidity Mining program. Thus Polkadex will make sure that there is no price slippage and continuous flow of liquidity to the order book.
Initially, there will be only two types of trade that will be supported by the Polkadex :
- Limit Orders
- Market Orders.
All market takers will incur a 0.2% trading fee and the market makers who submit their limit orders will incur zero fees for providing liquidity to the orderbook. Out of the trading fees, 25% will go into liquidity mining, 25% will go to governance and 50% will go to the Foundation.
It is now clear that Polkadex is making itself different from other DEXs by implementing various first-in-the-market innovations. Polkadex has quoted “We introduce Polkadex’s FSP (Fluid Switch Protocol). Polkadex is a hybrid DEX with an order book supported by an AMM pool. The first of its kind in the industry. Someone had to innovate. We are happy to do the dirty work. It may not be perfect, but we are sure that once implemented, it can solve the problem faced by DEXs paving the way for near-boundless liquidity and a high guarantee of trades if supported by an efficient trading engine. The trading engine itself needs a separate look and it is a whole dedicated project in itself; hence it is covered in another medium article. Let’s stick to the core protocol here.”
In FSP that the incoming order is matched against the order book first then proceeds further. For example, if the engine could not match any of the orders instead of market-making against the order book, then in that case it is matched against the AMM pool. Therefore, giving additional liquidity for the order book and the possible arbitrage option created in the order book.
We can say that this protocol will dramatically change the trading experience in the decentralized exchange or in the crypto world. AMM pools have brought lots of new features with it like it will not only solve the problem of liquidity it also pairs with the order book and creates frequent price swings in the liquidity pool. It will also make the arbitrage opportunity for the trader who is looking to earn from the swap pool. Polkadex intends to provide the best to their traders by fetching them the price they want without compromising the experience. Also, there is an option to switch seamlessly so that the focus would be on a fluid experience for the trader.
A Better Security Model
At the Blockchain technology level, Polkadex takes a different approach to traditional decentralized “DEX” exchanges by connecting it with Polkadot, allowing blockchain developers to secure their chain from day one, thanks to the Substrate framework allowing chain creation of interoperable, composable, and application-specific blocks without having to deal with the complexity of block production and the consensus mechanism.
Polkadex Mission and Vision
“Our mission is to build the perfect decentralized exchange.”
“We envision a world of financial inclusion, creating bridges that transfer value from traditional money markets to a decentralized store of value and trust, thereby preparing the world for a tokenized future.”
Polkadex is implementing the things which make him different from the other DEXs. All the AMM DEXes need to evolve and experience the new and unique innovation that will help the trader to go a far long way in achieving their goals. The main problem we usually witness in the crypto world is that any of the DEXs is not able to solve the problem for both the market-maker and the traders. In Polkadex, it is creating equal opportunities for both the market-makers and the traders as well. A fast order book and boundless liquidity to support the platform must be there. The Polkadex is becoming more popular these days due to their different benefits which Polkadex is given to their users.
Official Channels Polkadex: