Understanding Polkadex: Polkadex 101
What is Polkadex? What problems of modern traders and investors does it solve? How does it differ from existing CEXes and DEXes? How does Polkadex work? What is PDEX? The answers to all your questions are in this article!
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At Polkadex we are combining the benefits of centralized and decentralized exchanges to create a revolutionary decentralized cryptocurrency trading platform built for newcomers, experienced DeFi users and institutional traders alike.
Some have predicted that Polkadex could be “the first decentralized exchange to actually exceed the capabilities of centralized platforms.” However, if you have never heard of Polkadex, we have put together this quick guide so you can become an expert Polkadexer in no time.
So first things first: What is Polkadex?
Polkadex is a non-custodial, peer-to-peer trading platform that combines the benefits of CEXes and DEXes into one. Polkadex’s range of fully decentralized tools provides modern traders, investors and blockchain teams with unparalleled functionality. Built on Substrate and leveraging other sophisticated technologies, Polkadex is expected to become a major player within the Polkadot ecosystem upon our launch later this year.
We are a team of visionaries with clear goals in mind. One of Polkadex’s core missions is to bring DeFi to the masses. Through a heavy focus on user experience and creating an easy-to-use product interface, Polkadex will raise the quality bar in DeFi and kickstart the revolution in trading & investing. Polkadex’s slew of unique features will attract crypto newbies, natives and anyone in between.
Polkadex’s Products
Polkadex is not just one product, but the whole decentralized ecosystem aimed at covering all the needs of traders, investors and blockchain teams. We are featuring three key products, each bringing something unique to the market:
- Polkadex Orderbook: The functionality of a centralized exchange (CEX) with the security of a decentralized environment.
- Polkapool: Token swap platform akin to current decentralized exchanges (DEX) with built-in interoperability and perks like zero gas fees.
- Polkadex IDO Platform: The easiest way to introduce new tokens into the market for crypto projects and the most convenient way to invest in new tokens for investors in a decentralized manner.
Polkadex Orderbook & Polkapool
Both Polkapool and Polkadex Orderbook are cutting-edge platforms for traders of different levels including novice, professional and institutional traders.
Polkadex Orderbook helps us go beyond the basic swap functionality of current DEXes. We offer a classic swap functionality but add up an orderbook-based decentralized trading platform. Both are built with a unique mix of technologies. Polkadex Orderbook is Polkadex’s way of achieving the goal of combining the benefits of trading on CEXes and DEXes, while eliminating any possible bottlenecks of both.
Security of user funds with a CEX-like convenience
The highest priority for any exchange is the safety of user funds. Polkadex Orderbook is a non-custodial Layer 2 based exchange. This means Polkadex users retain full custody and control of their assets at all times. Users do not need to worry about hacks or other security threats which plague CEXes while swapping tokens, setting limit orders, or delegating their assets to third parties for bot trading.
Simply put, this means users will benefit from the security and self-custody of funds of a DEX while also benefitting from an easy-to-use trading interface with high transaction speeds of up to 500,000 transactions per second, super-low latency of less than 20 milliseconds, and advanced trading features that the community enjoys on CEXes.
Bots, HFT, fiat on-ramp and other features
Unlike the majority of DEXes, Polkadex allows users to set buy and sell orders and hand over their funds (while retaining custody) to third parties to profit from bot trading and high-frequency trading. All of these is available through the Orderbook functionality. Polkadex will also be one of the first DEXes to introduce the fiat on-ramp function, making it very easy for users to exchange their fiat money into crypto assets. It’s about time these features become available for DeFi users!
Lastly, Polkadex Orderbook’s zero cancellation fees allow traders to enter and exit markets in a dynamic fashion. They also incentivize API endpoints for both trading bot projects and liquidity providers. These improvements will have a positive impact on liquidity and make our cryptocurrency exchange platform more efficient for all users.
Advantages over DEXes
While Polkadex solves a lot of the issues that plague CEXes, it also tackles many of the current issues in the DEX industry.
Say goodbye to crazy gas fees. Trading on Ethereum based DEXes has been out of reach for many due to exorbitant network fees. This continues to deter millions of users from interacting with DeFi protocols. Polkadex’s Polkapool fixes this by offering swaps without gas fees.
As an automated market maker (AMM) inspired by existing AMM DEXes, Polkapool not only introduces feeless swaps but also eliminates front-running. Currently, front-running allows wealthier traders to “cut” in line and therefore get ahead of other traders by opting to pay a higher network fee. Feeless swaps and lightning-fast transaction fees on the Polkadex platform make front-running a thing of the past.
Polkapool will also take advantage of Polkadex’s cross-chain bridges and allow for seamless interoperability between tokens and liquidity on different networks.
Speaking of liquidity, the technology stack that powers the combination of Polkadex Orderbook and Polkapool lets Polkadex solve the issue of low liquidity faced by many DEXes and also makes slippage another thing of the past.
For a deeper dive into Polkadex Orderbook, check this article:
Polkadex Launchpad
We have built PolkaIDO, the Polkadex IDO Platform, fully on the blockchain, as a first-of-its-kind platform in the market nowadays. It will make the IDO (Initial DEX Offering) participation easier both for crypto teams and retail investors.
- Crypto teams can generate their tokens, conduct IDOs and crowdfunding in a hassle-free, time- and cost-efficient manner. IDO projects will also easily access liquidity through Polkadex Orderbook and Polkapool if governance decides to list them.
- Retail investors can benefit from on-chain randomness to get a fair chance of being whitelisted. This eliminates the need to hold large sums of platform-native tokens to participate in the IDO.
PolkaIDO Launchpad will prioritize Substrate-based tokens and other Polkadot ecosystem projects, but also work with ERC-20 tokens.
How does Polkadex make it all work?
Technology stack
Polkadex can offer all of the above advantages thanks to its uniquely innovative technology stack. In fact, Polkadex is the first project that uses the Substrate Abstraction Layer for SGX technology to build a decentralized exchange. It is also one of the first use cases of this technology in general.
Polkadex Orderbook’s architecture is unique in its combination of multiple technologies like blockchain, parachains, TEE, IPFS and other state-of-the-art technologies available in today’s blockchain industry. We took the best technologies in the blockchain and tech space and added our own innovations through in-house Research & Development.
The diagram below shows how Polkadex’s technology stack works in sync to execute a trade:
Polkadex Orderbook alone consists of four core parts:
- The native blockchain Polkadex Network
- The Intel-invented Trusted Execution Environment tech applied to crypto for the first time
- The Orderbook engine that maintains the high-performing orderbook and matches trades on it
- IPFS as the exchange’s insurance policy
Dive deep into our tech stack in the Medium article below:
Decentralized KYC
Polkadex also introduces a Decentralized KYC solution that will open up DeFi to more users including institutions and newcomers to crypto. Polkadex’s Decentralized KYC solution has been created in partnership with Fractal and KILT Protocol.
It aims to make DeFi even safer for our community members while allowing institutions participation in a compliant manner. It also helps us to introduce one of the first-ever integrations of fiat-to-crypto support on a DEX. Most Polkadex features, including trades under $5,000, staking, governance and swaps will not require KYC. Polkadex will even solve the privacy issue that CEXes face when it comes to KYC as we will never have access to personal data. Users’ personally identifiable information (PII) remains stored in users’ wallets at all times and is only communicated to Polkadex via on-chain cryptographic proof.
Learn more about Decentralized KYC below:
Polkadex Tokenomics
The tokenomics of PDEX, Polkadex’s token, have been developed jointly with some of the best minds in crypto-economics.
With a total supply capped at 20 million, PDEX supply is designed to fluctuate at times thanks to a burning mechanism that will bring supply back to the max amount using a network-regulated, automatic system of token burns.
Currently, since Polkadex is still in the Testnet stages and PDEX is an ERC-20 token, only around 15% of the total PDEX supply is in circulation. The remaining tokens will be distributed and allocated according to the chart and infographics below. After the Mainnet launch, all existing ERC-20 PDEX will be migrated to Polkadex and become native PDEX. The largest part of the tokens (41% of the total supply) will be kept in the Treasury and used for exchange listings, governance and ecosystem development grants.
PDEX is designed to have a synergetic relationship with Polkadex’s features and thus has multiple use cases. PDEX can be used to:
⚫️ Pay and get discounts on transaction and trading fees
⚫️ Participate in Polkadex IDOs
⚫️ Participate in on-chain governance of the network
⚫️ Become a validator of the network by staking
⚫️ Nominate validators and collators of the network
Get the details of PDEX tokenomics in the article below:
Polkadex Team and Background
Polkadex started its way in September 2020. The project is being built by a diverse team of over 20 highly skilled specialists spread around the world and led by its 3 co-founders — Vivek Prasannan, Gautham J and Deepansh Singh — who are all engineers and have solid development and business backgrounds.
The development team works on the core Polkadex blockchain, the Subtratee Enclave, Polkadex Orderbook, the website, UI/UX frontend and the mobile app for iOS and Android. Check out the Polkadex Github repository for more details on the dev work and the Polkadex website for a better picture of the whole team.
Lastly, Polkadex’s advisor team is composed of some of the best experts from the blockchain, finance, legal and marketing industries.
With a vision of financial freedom for everyone, Polkadex has caught the eye of the DeFi community. Polkadex was the recipient of a Web3 Open Grant for development and secured over $3 million in funding from prominent investors in the crypto space including Kenetic Capital, Outlier Ventures, JRR Crypto, LD Capital and others. Earlier this year, Polkadex was chosen by the Polkadot team and community as one of the most prospective projects on the Polkadot network out of 450+ projects in the ecosystem. We also got the chance to present Polkadex at Polkadot Decoded.
What’s next for Polkadex?
Our website features a comprehensive roadmap for delivering Polkadex.
Development is on track to fulfil the vision shown in the roadmap. Polkadex developers have already released the first features of the product to the Polkadex Testnet. The Orderbook and IDO Platform Testnet release with complete user interfaces are expected in late July/early August and the Mainnet launch is still on schedule for the end of September 2021.
Become a Polkadexer
Thank you for taking the time to learn more about Polkadex. For even more details, check out the Polkadex Docs and Polkadex website. Our partners’ websites, Coinmarketcap and Coingecko, also have some additional information.
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