CoinMarketCap takes a deep dive into one of the new projects in the Polkadot ecosystem.
But current decentralized exchanges tend to suffer from the same range of issues. They’re often slow, can be expensive and many lack the liquidity necessary to keep slippage low. But that might be set to change with the development of Polkadex — a Substrate-based DEX that boasts several innovations.
What Is Polkadex (PDEX)?
The platform consists of several main products, which include:
- Polkadex Orderbook — a decentralized order book-based exchange platform with no custody of funds.
- Polkadex IDO Platform — an IDO platform for Substrate-based tokens.
- Polkadex Mobile — a mobile trading app that supports cold wallets.
- Polkadex decentralized blockchain network — a decentralized parachain/blockchain that supports swap protocols with feeless swaps and no front-running.
The platform aims to make decentralized trading more accessible and powerful by maximizing liquidity and cross-chain support, as well as by becoming one of the first decentralized exchanges to support fiat currencies via Polkadex Fiat.
The Polkadex product suite is currently being built by a 20-member strong team led by CEO (and acting CTO) Gautham J and includes advisorial support from notable advisors including Garlam Won and Matthias Hafner.
How Does Polkadex Work?
The Polkadex Orderbook platform will also feature a number of tools designed to make trading both easier and more profitable. One of these is its asset delegation capabilities, which allow users to delegate their assets to a third party — such as a fund manager or algorithmic trading bot which can then trade on their behalf.
Since Polkadex Orderbook is a decentralized trading platform, users retain full custody of their funds (unless delegated) and do not need to create an account to source liquidity.
As of Q2 2021, Polkadex is currently running on its V2.0 testnet and launch of V3.0 of the testnet is planned for June 21, 2021. Mainnet launch is currently scheduled for Q3-Q4 2021 (on or before Sept. 15, 2021) along with development of the Polkadex parachain.
What Makes Polkadex Unique?
The team behind Polkadex are looking to leverage the latest blockchain technologies and create novel technical solutions to power its decentralized exchange and other products.
Zero Fee Trading
Polkadex Orderbook will support two order types: limit orders and market orders. There will be a small trading fee for market taking orders while market making orders will be completely free. On top of this, there are no gas fees or network fees for placing and removing orders as you would normally expect in a decentralized exchange. This makes it easy for trading bots and other API-based bots to engage in high-frequency trading.
Polkadex Orderbook is set to become potentially the first decentralized exchange to support fiat currencies thanks to its decentralized KYC capabilities. After verifying their identity using Polkadex's cryptographically secure KYC identification process, users will be able to purchase tokens directly using fiat (e.g. via credit card or bank transfer) without having to rely on a custodian. In essence, the Polkadex blockchain and application never stores user data. It receives cryptographic proof from another blockchain to verify unique users’ credentials.
Polkadex IDO Platform
Polkadex looks set to develop an IDO platform (with a testnet launch scheduled on July 5) for projects launching on Substrate and Ethereum — helping promising projects raise funds and bootstrap the distribution of their token simultaneously. Current features planned for the IDO platform include: zero gas fees, affordable fees (for projects and investors), on-chain governance and plug and play token creation features (e.g. vesting schedule and token support).
How Does Polkadex Compare With Uniswap?
For one, Polkadex supports a full order book, which uses a trusted execution environment (TEE) to ensure trades are securely matched. Uniswap, on the other hand, uses a bonding curve and sees users trustlessly draw liquidity from one or more liquidity pools.
Moreover, Polkadex is built on Substrate — a high speed blockchain platform that enables it to handle a large number of simultaneous transactions without buckling. This, in addition to its feeless swaps, aims to address the congestion and high fee issues that have crippled Uniswap in the past.
Nonetheless, both platforms are considered decentralized exchanges and can be accessed by anybody, anywhere, without needing to create an account. They’re also non-custodial, ensuring users retain full custody of their funds while trading.