BlockTalks x Polkadex AMA Transcript!
Hello! BlockTalkers & Blockchain Enthusiastic!
We recently hosted an AMA with Polkadex, on July 6th at 2 PM UTC. Many of you might have participated or many of not. But we make sure no one missed out from the knowledge shared by Vivek Prasannan, Co-Founder Polkadex. So here we are up with the AMA transcript, for those who missed the live session, this blog post will be a saver & feeder of knowledge for them.
Introduction Questions Asked By Team BlockTalks!
Q1. Could you please introduce Polkadex to our community in layman’s term?
Ans — Polkadex merges the benefits of centralized and decentralized exchanges in one platform thanks to the unique tech architecture of the product. Think of it as the best features that users enjoy in CEXes + the best features of DEXes - and removing any disadvantages of both.
Polkadex is a platform with 3 core products: Polkapool which is a DEX protocol release with swap functionality, Orderbook which is a fully decentralized exchange where users can set market buy and sell orders and do advanced trading, and an IDO platform that is based fully on the blockchain, built on substrate.
Each of these products brings something very unique to the market.
Let’s start with the Orderbook because it is the heart of Polkadex. We see it as a cutting-edge decentralized exchange that overcomes major issues of traditional DEXes like front-running, arbitraging, price slippage, and high transaction fees. Polkapool’s swap functionality is more common for DEX users. However, as we are building on the Polkadot network and Substrate, users don’t have to pay any network fees for swaps and trades, absolutely gasless trading! The trading fees will be set to be very low and can even be brought to zero for users who hold Polkadex native token, PDEX.
At the same time, we keep the highest level of security for all the operations on the platform and lightning-fast speed of up to 500K transactions per second achieved using the TEE enclaves.
Our IDO platform is also unique by design. As it is fully on-chain and transparent, both investors and blockchain teams conducting IDOs save money, time, and effort while interacting with the platform.
Q2. What are the advantages of Polkadex to other alternatives in the Blockchain field?
Ans — Technically we do not have a direct competitor because we mix different features from various fields and add some innovative things. We are also opening up a new set of crypto traders and whole new market. There is nothing like our DEX in the market. However, this question comes up very often in our community, too. Obviously, users and investors want to differentiate in the sea of DEXes in the modern market. Here are some of the things that make Polkadex stand out in the DEX space:
I will list some of the unique features
⚫️ High-Frequency Trading and trading bots allow Polkadex users to take full advantage of delegating their assets to third parties and profit from it.
⚫️ Polkadex IDO pallet fully on the blockchain that will be beneficial both for investors and blockchain project teams. With the Polkadex IDO pallet, token projects can create ERC-20 like tokens that feature built-in support for parachain transfers, as well as do one-click listing in the Polkadex Orderbook.
⚫️ We add a fiat on-ramp function, so users can buy crypto with fiat currencies directly via the Polkadex Orderbook. In this way, Polkadex becomes easier to kickstart for crypto newbies.
⚫️ Polkadex created a decentralized KYC process when users can store verification data in their wallets, never on the Polkadex platform. Polkadex takes user privacy very seriously. Decentralized KYC will allow us to add fiat on-ramp, keep exchange safe for users and attract institutional liquidity.
⚫️ Polkadex will gamify trading through NFTs on the platform to make the whole process more engaging. This feature will be live after the Mainnet launch.
⚫️ New Token Generation: Any tokens generated in Polkadex will feature native support for cross-chain transfers to other parachains, as well as other networks connected to the Polkadex ecosystem.
⚫️ High liquidity: Polkadex will deliver the institutional level of liquidity with the help of a decentralized KYC system that makes DEX trading competitive with CEX liquidity.
⚫️ Forkless Upgrades: Polkadex upgrades for new features bridges with new blockchains bug fixes so hard forks are a thing of the past!
As you see we bring a lot of unique things to the market and plan to lead the race on many fronts. Some time ago we published an article comparing Polkadex Orderbook exchange with other DEXes that are now top in trading volume and number of users. It will be helpful for a deeper dive into Polkadex vs other DEXes:
Here's the article for you to read:
https://medium.com/polkadex/polkadex-vs-other-dexes-why-we-are-different-dded31dbd6ca.
Q3. What are the major milestones Polkadex achieved so far & what are in the future pipeline?
Ans — We are a young project and are building for a bit over half a year, but we already achieved some milestones. I will list some important ones:
Received Web3 grant (completed the first milestone) - in september/october.
Secured funding from prominent figures in blockchain space - in December/January/February
Released 2 versions of the Testnet and had a technological breakthrough that led to the final Testnet version - First one in December, then other one with benchmarked in February, then the latest one (version 3) in July.
If some of the people here if they have been following us knows how they looked like. It was well appreciated and which actually helped us raise the funds :)
Held an IDO on Polkastarter on April 16th
Listed the token on KuCoin (as the 9th IEO Spotlight project) and Gate.io in April/May
We were chosen as one of the curated speakers on Polkadot Decoded 2021
Started the series of Testnet feature releases in June and demoed Polkadex Mobile App last week. Orderbook demo is coming this week.
Questions Asked on Twitter For Polkadex Team!
Q1. Polkadex being built on Substrate and being the only DEX having an order book, what other problems, (apart from gas fees, traffic, front running bots, etc) in the space does it want to find a solution to?
Ans — Polkadex is set to tackle many of the pressing issues faced by decentralized exchanges in the past few years. It was designed by traders with over 7 years of experience in the crypto industry. They have extensive trading experience on various decentralized and centralized exchanges and, hence, fully understand the pain points of the other traders.
Therefore, even though some of the priority issues tackled by Polkadex such as high gas fees, front-running, and the inability to trade with high-frequency trading bots, can appear handier for crypto natives, we have also put a lot of thought into making Polkadex in particular and decentralized exchanges, in general, the go-to solution for regular traders in traditional financial markets.
One of the major challenges faced even by the improved decentralized exchanges is the inability to attract liquidity and hang onto it. Polkadex will be taking some really innovative steps in order to bridge the traditional finance with the DeFi world and thereby bring sustainable liquidity to crypto trading. It is the reason why, we have been talking to institutional market makers to see how we can try and integrate such a system, which will not only open the doors to a new wave of crypto adopters but will also allow people from traditional markets to access the benefits of DeFi markets and earn revenue from it.
Q2. The Polkadex IDO platform allows token projects to create tokens similar to ERC-20. But in addition to this, can teams raise funds and be included in the Polkadex exchange? The only blockchain with which it is possible to create tokens within Polkadex is ERC-20?
Ans — The idea behind creating the IDO platform in Polkadex is to help new projects not only list the tokens for fundraising but also to create a platform giving them access to liquidity just like how they would get from a centralized exchange. Once sufficient bridges are tested out and liquidity is guaranteed, we will allow ERC 20-based projects and also Substrate-based projects to conduct their IDO. Then they can get listed on the Polkadex exchange through governance. We want to provide a one-stop-shop solution for new projects from fundraising to exchange listing in one place. Decentralization here helps us keep the cost-efficiency and stay away from making the process prohibitively expensive for the teams.
Q3. Regarding your roadmap, how do you see Polkadex in the long term? How will Polkadex stand out to other DEX riding this Polkadot hype wave? And what impact will Polkadex have on other DEXes as in what features does Polkadex have that the other DEXes are not doing?
Ans — We see Polkadex as a completely unique decentralized exchange that does not have comparable projects not only in the Polkadot ecosystem but in the entire crypto space at the moment. It is because, for the first time, traders will have access to decentralized security without having to compromise on the speed of transactions and executions they enjoy currently in centralized exchanges.
In the long term, Polkadex aims to be one of the leading up currency exchanges irrespective of the centralized and decentralized trading markets. We are also building Polkadex own decentralized bridges to other blockchains creating a decentralized junction point for liquidity. Our goal is to push the limits of the exchange mechanism using all the available technology in the Blockchain space today. This is the reason why it is so exciting to work at Polkadex and pretty of willing talent to join us.
Q4. Trustless cross-chain bridges help to bring any blockchain token to Polkadex in a non-custodial and trustless manner. But which blockchains are compatible with this cross-chain model? As for liquidity, is it also possible to transfer liquidity across bridges within Polkadex?
Ans — Our aim in creating trustless cross-chain bridges is not just to allow interoperability but also to eliminate any problems that traders may face when they try to access liquidity from another Blockchain to Polkadex. For example, most of the interoperability solutions involve a utility token that affects the simplicity of assets moving from one Blockchain to the other.
We are creating a near-native interoperability experience by researching new solutions and allowing people to bring in liquidity from other blockchains with the mechanisms that they are already familiar with. We are trying a more generic solution, meaning that if the fundamental encryption mechanism is derived from a particular parent Blockchain like bitcoin the same solution will work and integration will be possible.
Please look out for a full fledged research paper around the interoperability and cross chain mechanisms we are building natively for Polkadex.
It will be published later part of this year.
Q5. You are working on a new technology called Trusted Execution Enclaves, could you explain to me how it works and why I can continue to trust the security of POLKADEX? Is security sacrificed for transaction speed?
Ans — We didn’t invent TEE, its been around for a while.
Trusted Execution Environment or TEE preserves the data in an encrypted format and allows the trade execution without the control of the operator. This gives an operator a unique opportunity to take limited control of his/her assets without giving away the ownership itself. Because the trading requests are handled through specialized hardware, we are able to give a near-native performance, the same as you would experience interacting with a server. This technology is relatively new and has been seeing increased adoption in various use cases where the security of data needs to be preserved even from the people involved in the system management process. TEE is highly secure and there has been no known instance of a compromise other than in simulated lab environments where physical presence was required in all the nodes running it. In the Blockchain‘s case, in addition to the physical presence requirement, any hacker attempting to break needs to perform the action within six seconds of block time, which as you imagine makes the attack window extremely small.
Its the first time someone’s applying it to solve the problem of custody in crypto.
Questions Asked by our BlockTalks Community Members during live Session to Polkadex Team!!
Q1. Polkadex CEO Gautham J joins Ingo Rübe, KILT CEO, and Julian Leitloff, Fractal CEO, in a Web3 founder chat focused on KILT's Polkadex and SocialKYC solutions.
Can you share where I can see this in full conversation? do you have a link sir?
Ans — Yes, sure I think you need to start following our media channels to have access to all our updates. Here you go:
https://www.crowdcast.io/e/decentralized-kyc-on-polkadex
Q2. What is the advantage of Polkadex Orderbook code in auditing PDEX tokens? By which third parties will the migration be overseen?
Ans — Orderbook will be audited by srlabs, pretty reputed firm for substrate based projects. solidity smart contracts for moving tokens to mainnet will be audited by certik.io.
Q3. Can you tell us more about the mobile app you’ll be demonstrating this week? What features will be included? Will Polkadex plan to release it for Android and iOS?
Ans — You can go through this live video AMA to learn more about the mobile app.
https://www.crowdcast.io/e/testnet-series-mobile
Q4. What makes the algorithm and Blockchain unique in Polkadex and what are the main features that will make Polkadex successful in the future, then does Polkadex use AMM for liquidity pools in the chain of pools to market products on the Polkadex orderbook then what percentage is it?
Ans — The TEE orderbook, HFT APis for bots, traditional user experience and onchain settlements make polkadex a unique experience compared the etherdelta project in Ethereum, but add to it some institutional liiquidity and ability to withstand regulations in the world market, you are creating something sustainable in the long term and serve both types of users both traditional and crypto native.
Polkapool is a protocol release that helps users to have an alternative to uniswap Polka ecosystem. Though there are a few being built, we focus on feeless swaps which is a great feature which traders can utilize and not to mention dynamic bonding curve. For example, they can launch their own pool with their own bonding curve and see if they want to take it forward independently. Its fully decentralized and released as protocol and it will be completely up to the community to take it forward and use it.
Q5. Does your project support staking program? If yes. how is your stake system work, what is the requirement for user if they want to stake in your platform?
Ans — Staking program in Polkadex will work exactly like in polkadot. The only difference is they may need to support TEE enclaves to support secure transactions. staking reward will be about 10% of the total staked amount per year dynamically adjusted based on NPoS demand curve.
Q6. What is the life-changing offers that your project could provide to its investors that would make them satisfy holding your token?What are the benefits of holding your token and while holding your tokens, are there any governance vote rights for us?
Ans — PDEX is a governance token as well. Its going to be used even if we have a separate parachain to bridge. We will use the same token unlike some other projects that has specific tokens for kusama and one for polkadot etc. We will then allow these tokens to move freely using bridges. This allows more utility and velocity.
PDEX token will be used for the following:
Pay transaction and trading fees to get discounts on them
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.
Q7. The main thing is security of funds. Why people should invest in your Project ? Do you have any Security Circle to share?
Ans — Polkadex was originally conceptualized for fund security. Please go through our architecture and if required get a security consultant to study the same to understand how we are using this unique architecture to protect funds of participants.
You can read about it at :
https://docs.polkadex.trade/orderbookArchitecture
Q8. Can you list 1-3 killer features of Your Project, that makes, it ahead of its competitors? What is the competitive advantage, your platform has that you feel most confident about?
Ans — 1. Orderbook with High frequency trading with bots. Never possible on DEXes even now. Solana is still above 100ms. We aim for 20ms subsecond latency.
2. Feeless swaps and no frontrunning in pools
3. Single hop interoperability bridges with layer 1 chains like Bitcoin, Litecoin, Ethereum, BSC, Cardanao, you name it.
Q9. What is your vision and the goal you want to ultimately achieve with Polkadex since we have similar projects who claim to be doing the same thing of what you’re doing?
Ans — Nobody is currently doing exactly what we are doing. They are trying to solve the problems in a different way, but we are unique in the approach. Time will tell whose approach was wright. We are essentially curious engineers and scientists at heart and we believe that pushing the limits of decentralization to allow peer-peer settlements is crucial for the growth of this industry. In the long term, we want to be the top liquidity junction for crypto industry where people can bridge assets, trade and move into other chains inexpensively.
