Not your keys, not your coins! That is why we all need Decentralized Exchanges. When it comes to decentralized exchanges that have something new and different to offer, two major platforms stand out: Uniswap and Polkadex. Both platforms make crypto trading easy. And to give users...
Not your keys, not your coins! That is why we all need Decentralized Exchanges. When it comes to decentralized exchanges that have something new and different to offer, two major platforms stand out: Uniswap and Polkadex.
The Current Problems of Decentralized Exchanges
The big comparison.Centralized Exchange
CEXVS
Decentralized Exchange
DEX#blockchain #crypto #digitalasset #trading #finance pic.twitter.com/elbYNZie4L— Dr Martin Hiesboeck (@MHiesboeck) July 11, 2023
If you’ve used a DEX for trade, you’d spot some major drawbacks with these platforms. For example:
- DEXs are expensive to use. Most Dexes run on networks that are prone to congestion. This results in expensive trades due to high gas fees.
- They have limited functionality and are prone to slippage.
- Poor User Interfaces.
However, Polkadex has found ways to resolve some of the challenges most DEXes face. We’ll talk about that shortly. But let’s look at Uniswap for a minute.
A Look at Uniswap
1/ Uniswap burns the most gas of any dapp on the Ethereum network — which means we’re the most usedBut what is ‘gas’? Why does it spike? And what can we do to lower it?
Let’s dive in— Uniswap Labs(@Uniswap) May 24, 2023
How does Uniswap Work?
Uniswap facilitates trades using an automated market maker (AMM) mechanism. AMMs rely on smart contracts to create and manage liquidity pools.
So, users access the pools and can use their tokens to swap assets within the pools. Liquidity providers contribute to pools to earn fees.
I work in crypto because of the immense positive impact I believe it can have on the world, removing gatekeepers and increasing access to value and ownership.
I’m proud of the ways @Uniswap Labs has contributed to that effort and want to make sure we’re creating sustainable…— hayden.eth(@haydenzadams) October 16, 2023
Polkadex and How It Changes the DEX Market
Polkadex is a non-custodial order book exchange built on Substrate. Polkadex currently enables users to trade tokens from different Polkadot parachains and will soon add multi-chain support for Ethereum.
Polkadex combines features from a CEX (orderbook) with those of a DEX. In other words,, Polkadex offers the speed, functionality, user experience, and affordability of a CEX, while allowing users to maintain custody of their assets.
Polkadex is a non-custodial, peer-to-peer exchange. So, users hold their assets in their wallets. And directly trade with each other.
Due to the price efficiency of order books– which means they need lower TVL to offer liquid markets–DEXes like Uniswap have been trying to make AMMs resemble order books (Uniswap v4). Other order book DEXes have been built in the past, but these have either been throttled or siloed by the chains they run on, meaning either speed or interoperability is sacrificed. Polkadex’s unique value proposition allows them to:
- Provide DEX users with high trading functionality and interoperability.
- Attract centralized exchange users with a non-custodial model free of centralized malpractice.
Polkadex is not a simple Dex with low transactions and Orderbook as fast as an L2 on the Polkadot Network, it is much more as it integrates Thea which will integrate Eth and L2 in the first phase. Polkadex also has 200 active validators. See the roadmap below.@polkadex pic.twitter.com/oOtjEptON0— PolkaDonX (@SecretKidCrypto) October 29, 2023
More About Polkadex
Polkadex allows users to trade like on CEX. But in a decentralized environment. So, users can not only place limit orders and wait for their desired price, but they can also use the orderbook to place market orders.
Merging the Features of a CEX and a DEX
Other Polkadex Tools
The Polkadex parachain on Polkadot allows the Polkadex Orderbook to list tokens from across the Polkadot ecosystem. Tokens like DOT, ASTR, iBTC, and more.
Another major tool is THEA, the Polkadex interoperability layer which is designed to make deposits and withdrawals to and from Polkadex feel as they do in a CEX. THEA is run by the Polkadex validators and therefore inherits the security of the runtime. Ultimately, it is designed to add decentralized bridging support for networks like Ethereum and Polygon, which will gradually make Polkadex Orderbook as interoperable as existing CEXes.
Polkapool, an AMM-based pallet on Polkadex, will allow users to auto-convert a small amount of their deposits of certain assets into PDEX, thereby making the deposit process seamless, even for those who do not have a Polkadex account with a PDEX balance before using Polkadex Orderbook.
$PDEX is the native token of @polkadex and our STAKE AND EARN promo is currently running with 24.54% Annual Percentage Yield (APY) to be benefitted by the Investors .
BY staking PDEX, you have the Access to actively participate in securing the network rewards tokens#PDEX pic.twitter.com/RQFM9db49F— Basil Global DeFi (@bbhansome) September 23, 2023
Trading on Polkadex is pretty simple. An average user can understand the interface. The simple onboarding process involves connecting your wallet and creating a trading account. There are no KYC requirements.
The PDEX Token
Polkadex has its native token, PDEX. You can use PDEX for the following purposes:
- Pay for network fees.
- Participate in the on-chain governance of Polkadex.
- This includes proposing and voting on listings.
- Stake PDEX to secure the Polkadex network while you earn.
How Does Polkadex Differ From Uniswap
Back to our original Polkadex vs. Uniswap comparison. Both platforms provide good decentralized features. However, Uniswap is DEX 1.0. And Polkadex is DEX 2.0. Polkadex is the next generation. It seeks to resolve some of the challenges of platforms like Uniswap.
Polkadex merges the best of a CEX and DEX on one platform. This allows for a wider range of trading features. Uniswap, while it keeps iterating to resemble an order book, does not achieve the price efficiency or user experience of a true order book.
3/ Limitations of Uniswap V3 LP farming:
∙ Working with CLAMMs is difficult and creates a barrier for liquidity providers.
∙ Constant rebalancing is needed to avoid impermanent loss.
∙ Liquidity management protocols are limited in their effectiveness. pic.twitter.com/eXB2R8bRex
It gives DApp builders much more flexibility than Ethereum. It also currently supports feeless trade swaps. And addresses the issues of high network and trading fees that Uniswap suffers from. Polkadot is quickly becoming the most exciting DEX on Polkadot. It has the potential to keep leading the DOT ecosystem. And DeFi at large.
Bitcoin on Polkadot via Polkadex
- iBTC/USDT.
- PDEX/, USDT.
- DOT/USDT.
- ASTR/USDT.
iBTC is now live on Polkadex OrderbookHello #BitcoinPlace zero fee, non-custodial limit and market orders at CEX-like speeds and integrate trading bots on the $iBTC / $USDT trading pairhttps://t.co/2lOjmZtgWr pic.twitter.com/bXXEyIrfAq— Polkadex (@polkadex) November 6, 2023
Wrapping up. Polkadex has several advantages that an established DEX like Uniswap lacks. Polkadex presents an easy way to trade crypto in a decentralized way.
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.