The CEXiest DEX Just Got Sexier

The new Polkadex Orderbook Hestia update pushing CEX-like decentralized trading to the next level

6 min readMar 14, 2024

A runtime upgrade was executed yesterday, Wednesday March 13th, on the Polkadex network. After 24 hours of scheduled downtime, a new Polkadex Orderbook is here!

Part of Polkadex’s Hestia release, the latest update to Orderbook includes a completely redesigned trading interface, the on-chain foundations for the upcoming liquidity mining program, and the introduction of trading fees. Of course, the update also includes plenty of bug fixes for an even smoother trading experience.

Trade on the newly enhanced Polkadex Orderbook now!

🎨 More than just a fresh coat of paint

The Polkadex Orderbook interface has been overhauled to enhance every part of the trading journey. The new cleaner, and sleeker interface manages to provide all the details traders need in one screen, while reducing noise and taking advantage of all available space in the most efficient way.

DOT/USDT pair on Polkadex Orderbook

The new interface is not only an aesthetic upgrade, but it also improves functionality with adjustable components, including a whole new order placement panel, a market pair ticker, and the new notifications tab. Overall, there are user friendly updates to every facet of the product, from the new and improved history tab that keeps all trades, orders, and transfers easily accessible, to details like being able to measure the 24 hour trading volume of a pair in either its base or its quote assets. Traders should look forward to a noticeable performance boost and a smoother, more intuitive experience the next time they make a trade on the CEXier DEX.

⛏ Heigh-ho, to the liquidity mines we go

Perhaps the most important piece of this huge update is the partial launch of the Polkadex liquidity mining program (LMP), which takes inspiration from dYdX’s proven design. The LMP’s Rewards component, half of the fully-fledged LMP, is now running on the Polkadex network. It uses PDEX from the treasury as rewards to incentivize liquidity growth based on certain parameters which can be changed per epoch (roughly 28 days on the network), as determined by governance. The rewards are split into two categories: liquidity mining rewards to incentivize market-making, and trading rewards to incentivize trading.

The trading rewards are calculated based on trading fees paid, with a rewards allocation proportional to a trader’s contribution to the trading fee pool. The liquidity mining rewards depend on the liquidity provided by a market maker as long as it’s within the maximum spread (%) and above the minimum market depth (measured in a pair’s quote asset) parameters.

Governance-led liquidity incentives

The rewards will differ from one pair to the next based on preferences determined by governance, just like the total PDEX allocated for rewards and the rewards parameters will also be determined by governance. While the first reward parameters will be set with the help of the Polkadex council, edits to the configuration of LMP rewards will take effect in each subsequent epoch after an approved LMP configuration vote is passed.

A treasury proposal requesting PDEX to cover the LMP’s total rewards for a designated amount of time will be put up for discussion soon.

As of this update, the LMP’s scoring system is live. The scoring system assigns points to market makers and traders which can then be applied to derive a proportional rewards allocation. While the scoring is active, the current LMP analytics section in the new Rewards page will remain unavailable until infrastructure providers like OnFinality and RadiumBlock update their validator nodes to v6.0.0.

Crowdsourced liquidity?

The second half of the LMP is the crowdsourced liquidity component which will allow anyone to provide liquidity to market makers of their choice in exchange for a return (as a piece of the LMP rewards earned by the market maker). The system is similar to how staking works on the Polkadex network, except it incentivizes active liquidity on the exchange. The code for this component of the LMP is already finished and running on the Polkadex network, but the component’s launch is pending due to regulatory compliance. The planned formation of the Polkadex DAO should help unlock the feature later this year.

🪙 Hello trading fees

After an extended period of fee-less trading, trading fees are now live on Polkadex Orderbook with 0.1% fees on both the taker and the maker sides. The introduction of trading fees allows for a more self-sustainable product while also increasing the utility of the PDEX token.

Currently, trading fees are accumulated in base and quote assets. Trading fees accumulated in PDEX are burned while fees in all other assets are constantly accumulating at this address.

Fee basket auctions

The new trading fee component introduces an on-chain auction mechanism for bidding on a basket of accumulated trading fees using PDEX. The accumulated fees are put together in a basket and auctioned off to the highest bidder (bidding in PDEX) on a weekly basis, unless a different cadence is decided upon via governance. A frontend for the auctions will be given priority once Polkadex governance decides to activate auctions. The PDEX earned from the auctions, just like the rest of the PDEX accumulated in fees, is set to be burned.

While this is the current default configuration for trading fees, Polkadex network participants will be able to determine which assets accumulated from trading fees are subject to a PDEX buy-back, as well as the ultimate destination of the accumulated fees — whether burned or allocated in a different manner. Even the fee structure itself (0.1% for all traders) can be reconfigured via a governance vote.

Overall, the introduction of trading fees and fee basket auctions adds extra utility and introduces deflationary forces for the PDEX token.

🐛 Bug fixes

Last but not least, the new update has a ton of bug fixes. While all the new bug fixes may not be as visible as the new features listed above, their positive impact on Orderbook performance should be palpable. The most important bugs we squashed were ones affecting market-making operations. However, the whole trading experience should be much smoother with this new update.

🧑‍💻 Open Beta Program

Of course, while known bugs have been fixed, that does not mean the Orderbook is now completely bug free. It is recommended to observe caution when placing trades, especially with larger amounts. If you happen to run into any bugs, be sure to log them in the Open Beta program repository for a chance to earn some PDEX rewards. While the program has been sitting on the backburner for some time now, we’re aiming to catch up on past issues and distribute any applicable rewards in the backlog.

💹 New era for Polkadex Orderbook

This update takes Polkadex Orderbook to the next level and lays the foundation for growing liquidity incentives which should increase overall liquidity across Polkadex Orderbook pairs and attract even more traders. Nothing better than trading on the CEXier DEX in anticipation of the EVM connection and ETH listings!

By the way, the Polkadex Crowdloan is still live!

Over 300 contributions have propelled Polkadex to the lead with over 46k total DOT contributed. That puts Polkadex in a good position to secure the slot renewal in one of the last 2 remaining auctions. And we’re also really close to reaching the 50k total DOT rewards cap so make sure to contribute before that if you want to get your 3 PDEX per DOT rewards!

💹 Website | Polkadex Orderbook | Crowdloan page | Claim your Crowdloan 1.0 Rewards

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