It’s been one heck of a week, to say the least. Depending on what side of the fence you stand on, you’re either happy that you waited to buy into whatever altcoin you’ve been eyeing. Or you’re kicking yourself for not waiting. Either way, I assure you we’ve all been there and forgot to grab our t-shirt on the way out. If this is the first time you’ve experienced this in the market, congrats, you’re well on your way to becoming a crypto OG before you know it. While no one likes to lose half the value of their position in a blink of an eye, it teaches valuable lessons about managing your risk and helps mentally prepare you when the next FUD cycle makes its way through the crypto space. Because it’s not the first and far from the last time a manufactured narrative will cause chaos in the markets. Moving into this week’s review, we’ll be looking at a new take on the traditional DEX with Polkadex.
Introduction
Polkadex is a new and completely decentralized p2p orderbook based exchange built for the growing DeFi ecosystem. More specifically, the Polkadex Orderbook is a non-custodial Layer-2 based exchange built on the Polkadot Network. Polkadex’s design focuses on reducing the complexity of the Polkadot chain. Believing that only information which needs to be publicly verified should be on-chain. In Polkadex the order book, trader assets management, bridges between Polkadot and Ethereum, and market-making bots are all managed on-chain. Trading features like market data aggregation, technical analysis indicators, storage and retrieval of trade history, and all the remaining exchange-related data are managed off-chain. Enabling Polkadex to increase the throughput of trades and make it comparable to the efficiency currently present in centralized exchanges. With trustless cross-chain bridges helping to bring any blockchain token to Polkadex in a non-custodial and trustless manner. Through Parachains with the Polkadot Network, and through Snowfork on the Ethereum Network. Polkadex is built specifically for integrating with other liquidity providers using forkless upgrades without the need to access user funds or contract keys. The majority of new DEXs just copied Uniswap and moved to an AMM-based system. On Polkadex, they aim to find a real solution to users’ needs and create the ultimate trading experience that doesn’t make all the sacrifices of current DEX platforms.
Polkadex supports two types of trades, Limit and Market Orders. Market-taking orders have a competitive trading fee of 0.2%, while market-making orders have zero trading fees. Market makers are heavily incentivized by receiving half of the collected trading fees, with the remaining half paid to the Polkadex Team. Polkadex tries to solve the problem of low liquidity by having AMMs directly connected to its trading engine, acting as on-chain market-making bots. So when a trade is not matched against the Polkadex order book, the Polkadex Engine will check if these on-chain bots can make an order that will match. With a trade executed only if a better price is provided by the bots, otherwise, it’s inserted as a market-making order in the order book. This helps to ensure that there are no price slippage issues for traders and in the first version, Polkadex will focus on having a constant product market-making bot. As it stands now, Polkadex will be…
