Polkadex Needs You: Let’s Win a Parachain on Polkadot Together
The future of Polkadex is in your hands! We need your support to win a parachain slot in the auctions starting this January. Read this article for our parachain auction strategy & crowdloan rewards.
Polkadex is going for a parachain slot and we need your help to win!
You can read full information about our crowdloan also on the dedicated Polkadex Crowdloan website.
The next generation of decentralized exchanges is coming. The era of Polkadex is closer than ever. An interoperable, trustless, and secure orderbook-based decentralized exchange that will revolutionize the way people trade digital assets is almost here. However, we need your help to make it happen!
More specifically, we need your support in the form of DOT contributions to the Polkadex Crowdloan, which will go live this January. Your loaned DOT will go a long way towards fulfilling the original vision of interoperability and trustless cross-chain transfers. Essentially, it will make Polkadex a parachain.
From the beginning, 10% of the total supply of PDEX (2 million PDEX) was allocated in our tokenomics for the purpose of obtaining a parachain slot.
To thank Polkadexers for their Crowdloan contributions we will distribute 2 mln PDEX tokens in rewards & other cool perks.
From a short introduction to the concept of parachains to a rewards breakdown and Crowdloan participation guide, this article serves as a comprehensive and detailed breakdown of the Polkadex parachain strategy. It’s the go-to guide for Polkadexers looking to rise up to the moment and make the Polkadex vision a reality — all while earning some PDEX on the side.
What is a parachain?
One of the key features of the Polkadot ecosystem, parachains are specialized Layer-1 blockchains built on top of the Polkadot network. They are tailored to specific use cases (in Polkadex’s case: trading) and are interconnected, which means data and assets flow freely between them. Thanks to this, parachains are able to transcend the boundaries that currently leave existing layer-1 blockchains isolated. Projects building on parachains are able to utilize this interconnectivity to create new and innovative products with unprecendented interoperable solutions. That’s exactly what Polkadex is doing.
Other advantages of parachains include being scalable, having low fees, and being easily upgradeable thanks to the Substrate blockchain framework. All these are improvements on existing Layer-1 blockchains. However, one of the most important advantages is that parachains automatically benefit from the security of the Polkadot network as soon as they connect to Polkadot, therefore reducing the costs required to ensure security on existing layer-1 chains.
Parachains don’t last forever. A parachain slot is ‘leased’ for a certain amount of time (96 weeks in Polkadex’s case). In order to win a slot, Polkadex will bid in the so-called parachain auctions.
Parachains slots are determined by candle auctions in which the winner is the project with the highest contribution at a random given point during the auction. In this scenario, the longer a project has the highest DOT contribution, the higher the chances it has to win a respective auction. But why is winning the auction so important? What are the advantages of becoming a parachain?
What’s in it for Polkadex?
As you may remember, the Polkadex mainnet launched in September of 2021. The Polkadex network is a blockchain that uses the Substrate framework and is therefore easily upgradeable and tailored to Polkadex’s future use cases. However, the Polkadex network does not yet benefit from the interoperability and shared security that come with being a parachain.
Interoperability is key for Polkadex. The ability to trustlessly move an asset from a different chain over to Polkadex will be a game-changer for traders and decentralized finance fans alike.
While the Polkadex team has been working on its own solutions to increase interoperability, making the Polkadex network a parachain will greatly reduce the costs of bringing tokens and liquidity from other chains to the Polkadex network and vice versa.
Once Polkadex becomes a parachain, it will be able to connect to any other parachain and the Polkadot network itself to start sharing assets in a trustless way. This will not be limited to tokens from outside the Polkadex network being traded on Polkadex, but will also apply to tokens generated on Polkadex (through PolkaIDO, for example), which will have native support for cross-chain transfers to other parachains and connected networks.
More importantly, winning a parachain slot will help Polkadex cement its place as a leading DEX on Polkadot and will bring it one step closer towards becoming THE Trading Engine for Web3.
What exactly is a Crowdloan?
In order to win a slot in any of the auctions between now and March 10th, Polkadex is looking to garner enough community support in the form of DOT through a Crowdloan. A Crowdloan is just one of the many ways to raise funds to cover the cost of a parachain lease. It also allows for Polkadexers to have a direct impact on the parachain auction outcome.
The word ‘loan’ may be confusing to some. Contributing to a Crowdloan means your DOT is locked in a Polkadot account for a certain period of time, either until the auction ends if your supported project does not win, or until the parachain lease ends if your supported project wins the auction. In the case of Polkadex, your DOT will remain locked until 96 weeks post-parachain launch (if we win). During the period your DOT is locked, you’ll be receiving PDEX. Your locked DOT are never accessible by the parachain project and can only be used to bid on the parachain auction. In other words, the Polkadex team, or anyone else, for that matter, physically cannot control DOT contributions.
So, what’s in it for you?
PDEX. Lots of PDEX. As mentioned above, the Polkadex tokenomics explicitly set aside 2 million PDEX for this exact moment. These 2 million PDEX will be given away to contributors as rewards for their DOT loans. Out of the 2 million PDEX, 1.5 million are set aside for base rewards for any participant, while 0.5 million are set aside as bonuses. We have also set the Crowdloan cap at 8 million DOT.
Using the totals above, the minimum base rewards ratio is calculated to be 0.1875 PDEX per 1 DOT contributed. This means that if you were to contribute, say, 100 DOT to the Polkadex Crowdloan, you would receive at least 18.75 PDEX. Why do we say ‘minimum’ and ‘at least’? Because this ratio takes into account that the Polkadex Crowdloan will reach its 8 million DOT cap. And while that is possible, chances are the total contributed DOT amount ends up being lower than that. That would not be an issue though, since the rewards are split proportionately among Crowdloan contributors.
Meanwhile the 0.5 million PDEX set aside for bonus rewards gives you the chance to increase your PDEX rewards by over 20%. This includes a 15% early-bird bonus for all contributions within the first 72 hours of the Crowdloan going live, an extra 5% on contributions made after the first 72 hours and until the 9th day, and a total 10% referral bonus (5% Referral & 5% Referred) available through the Crowdloan partners.
Using the earlier example of a 100 DOT contribution, you could earn a minimum of 18.75 PDEX as a base reward and ~2.81 PDEX as an early-bird bonus, bringing the total rewards to around 21.56 PDEX plus your referral bonus!
Last but not least, the top 1,000 contributors will receive a limited-edition, utility-based Polkadex NFT on top of their base PDEX rewards and bonuses.
When will the PDEX rewards be distributed?
A quarter of the PDEX rewards will be released in bulk once Polkadex becomes a parachain, while the remaining three quarters will vest linearly over the 96 week lease period.
How to participate in the Crowdloan
All you need is DOT. To help Polkadex secure a parachain slot while you earn PDEX in return, all you need is transferable DOT. By transferable DOT, we mean any DOT you have unlocked and unbonded. Staked DOT will not work, unless you have unbonded it or are in the process of unbonding it.
Once the Polkadex Crowdloan goes live, you will be able to start contributing your DOT immediately in different ways. In order to help you do so, we will publish a short article with links and detailed participation guides on Monday.
You’ll be able to contribute directly on-chain, or through our partner projects, wallets, and centralised exchanges.
Polkadex has partnered with Parallel Finance, Bifrost, and Equilibrium to offer an enhanced Crowdloan experience for all Polkadexers. Those who contribute through these partners will receive even more bonus rewards on top of their PDEX, including liquid DOT, referral bonuses and extra tokens.
Extra rewards per partner
Parallel Finance Rewards:
- 4 Para tokens per DOT
- 1 cDOT per every DOT
- 5% Referral Bonus
- 10 EQ tokens per DOT
- 1 xDOT per every DOT
- 0.5 EQ per DOT referral bonus
- 0.04 BNC per DOT
- 1 vsDOT per every DOT
- 0.02 BNC per DOT referral bonus
What you’ll need to contribute to the Crowdloan
In order to contribute directly on-chain or through the Crowdloan partners, you will need a Polkadot.js account and, of course, some DOT. Here’s how you can create your own Polkadot.js account if you don’t have one already. Once the Polkadex Crowdloan goes live and you’ve got some DOT in your Polkadot.js account, navigate to your desired partner website, connect your account, and follow the steps!
While you won’t benefit from some of the extra rewards offered by our launch partners, you are also able to contribute to the Crowdloan directly on-chain. In order to do so, connect to the Polkadot network using the Polkadot.js/apps interface, and navigate to Network -> Parachains -> Crowdloan. You will see Polkadex on that list in the next coming days. After you see it, click on ‘+ Contribute’, select your contribution amount, and sign the transaction. That’s it!
⚠️ Important note for all contributors: The existential deposit ⚠️
If you’re contributing to the Polkadex Crowdloan using a Polkadot.js account, you’ll want to pay extra attention to the content in this section.
Heads up! If you do not currently have any PDEX in your Polkadot.js account and wish to contribute less than 22 DOT, please buy at least 1 PDEX to ensure your account meets the existential deposit requirement and is in active state to receive the reward. This is because the existential deposit on a Polkadex account is 1 PDEX, and if an account has lower than 1 PDEX in its balance, the address will be inactive and the account will not be able to receive PDEX.
If you do have PDEX in your Polkadot.js account, you can contribute as much or as little DOT as you want without needing to worry about the existential deposit.
With this in mind, the Polkadex team highly recommends you have some PDEX in your Polkadot.js account before participating in the Crowdloan, especially if you prefer to contribute an amount smaller than 22 DOT.
More launch partners
We’ve also partnered with centralized exchanges, wallets, and other organizations who will also offer Polkadexers the chance to participate in the Polkadex Crowdloan. Check the full list of partners below. Once the Polkadex Crowdloan goes live, we will publish an article with links to the direct contribution pages for each partner:
Top Centralised Exchanges
- Details & Incentives TBD
- Polkadot.js Wallet
- Note: Do not use a Ledger device to contribute to the parachain. Ledger does not currently support Crowdloan participations which could put your PDEX reward tokens at risk.
Others (Incentive & Details coming soon)
Ready for the Polkadex Crowdloan?
Whether you’ve been impatiently waiting for this moment to come, or whether you’ve discovered Polkadex in the last few days, it’s time to get together and work towards the common goal of winning a parachain auction!
Follow the channels below and join the Polkadex community to connect with fellow Polkadexers and stay as up to date as possible!
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