Financial markets, including the crypto market, need to advance their transactions Trading companies have. In the crypto market, trading companies are divided into two categories, centralized and decentralized, each of which has its own advantages and disadvantages. But in the meantime, a platform called Polkadex has been developed, which aims to provide the best services by combining the advantages of centralized and decentralized exchanges. But what is the Polkadex exchange and how does it combine the advantages of both types of exchanges?
In the rest of this article, stay with Valex to learn more about the Polkadex exchange and discuss the future of this project.
Introducing the exchange Polkadex
Polkadex exchange is a decentralized platform in the Polkadata ecosystem and uses the features of this platform. This platform is non-custodial and operates a peer-to-peer network and provides trading services for cryptocurrencies. Polkadex decentralized exchange has been developed with the aim to provide users with the advantages of both types of exchanges (centralized and decentralized) to become the best decentralized exchange.
The platform has been developed by an experienced team of renowned individuals including Vivek Prasannan (Software Engineer) and Matthias Hafner (Economist); Most of the Polkadex team members are experts in the field of software, artificial intelligence and economics. This project was launched in early 1400 and during this time it has cooperated with famous partners including Web3, Okex venture and CMS. Polkadex exchange has also launched its native currency called PDEX.
What is the advantage of Polkadex exchange over its competitors?
We found out above that the Polkadex exchange is trying to combine the advantages of both types of exchanges, and the advantage of this platform is summed up in this issue. But how does the Polkadex decentralized exchange do this?
What are the advantages of centralized exchanges?
To answer this question, we must first get acquainted with the advantages of each. Centralized exchanges, like other centralized financial institutions, use the Order Book. Buyers and sellers register their desired order and price in the order book, then a group called market maker examines these orders and connects the overlapping items. In this type of mechanism, due to the centralized processing environment, the transaction speed is high and users are faced with an easier user interface. But on the other hand, in this type of mechanism, there is a possibility of price manipulation by the Bazarsaz group, and since the assets are available to the exchange, it is somewhat challenging in terms of security. In general, these types of exchanges have higher speed and user interface, but lower security.
What are the advantages of decentralized exchanges?
Decentralized exchanges operate with a different mechanism. In this way, most decentralized exchanges replace the order book with liquidity pools and adjust price ratios according to supply and demand. In this type of mechanism, there is no centralized market maker, and the process of market making and determining price ratios is assisted AMM mechanisms (Automatic market maker) is done. In this type of exchanges, due to the decentralized nature of the processing environment, we are justified with a lower speed and higher fees, but the whole process is done in a decentralized manner and the assets of the users are at their disposal. For this reason, the security of assets is higher in this type of exchanges.
Combining all the advantages of exchanges with Polkadex!
Polkadex exchange has launched a decentralized order book and unlike most decentralized exchanges, it does not have an AMM mechanism. This platform offers a high-speed order book, low fees and a more convenient user interface, while also increasing security due to the decentralized management and processing environment. Unlike centralized exchanges, in Polkadex exchange, users are responsible for custody and asset management, and this is an important point in increasing security. In general, it can be said that Polkadex decentralized exchange has brought the mechanism of centralized exchanges to a decentralized environment by removing the automatic market maker and replacing it with programming codes and smart contracts.
Examining the road map and the future of the project Polkadex
Polkadex launched its order book on the mainnet in late 2022, but it is not yet widely available. For the first three months of 2023, Polkadot has planned programs such as debugging the network, launching a bridge between Polkadot and Kusama, and launching an application for IOS and Android. For the second and third months, Polkadex has planned goals such as creating compatibility with trading robots and market makers, creating a bridge between Ethereum and Polygon, and launching leveraged trading.
The cost of fees in the exchange Polkadex
Like centralized exchanges, transactions are carried out in two ways, Market and Limit, in the Polkadex exchange. Market transactions are done instantly and according to the current market price; The fee for this type of transaction is 0.2% of the total transaction. But limit transactions are a type of transactions where the user sets the desired price for buying or selling an asset under an order and waits for another user to register an order with the same price so that the transaction between these two users is completed. Limit transactions in the Polkadex exchange are carried out without any fees; Users do not even need to pay on-chain fees to register or cancel these types of transactions. Zero fees can also be highly attractive for high frequency trading (HFT) and attract large traders to this exchange.
Trading in large trading organizations is done by trading robots. These robots open and then close a trade in just a few seconds, taking a small swing in price, but they may repeat this hundreds of thousands of times a day (this type of trading is called HFT, or high-frequency trading). These robots need a platform with the lowest fees to make transactions so that they don’t pay high fees for every small fluctuation. Low and even zero fees on the Polkadex exchange can also open the feet of trading robots to this platform.
The difference in fees between market and limit transactions is because market transactions act as a taker and withdraw liquidity from the platform. Meanwhile, Limit transactions as a Maker injects liquidity into the platform. With the injection of liquidity, the flow of transactions becomes smoother, while with the withdrawal of liquidity, this flow faces a challenge.
Polkadex exchange for Iranian users
While the Polkadex exchange benefits from the advantages of centralized exchanges, it is essentially a decentralized platform; As a result, users can use this platform without any worries. Of course, this exchange also has a decentralized authentication (KYC) process, but this is not a concern for Iranian users and they can use the services of this platform without restrictions.
Digital currency PDEX What is?
PDEX currency is the native currency of the Polkadex project and is based on the ERC20 standard Ethereum platform has been created. This token has a governance role and its holders can participate in voting and management of the Polkadex platform. This token can also be staked, and users can earn more than 25% profit by staking this cryptocurrency.
The method of distribution (Tokenomics) of the PDEX token is as follows:
- 9 percent for the project team
- 7% has been pre-sold
- 8% for strategic partners
- 10.193% has been sold privately
- 41% is locked in the project development fund
- 10% to participate in the auction of parachains
- 6 percent for the team of consultants
- 6.807 percent for the marketing department
- 2 percent for the project community
At the time of writing this article, PDEX cryptocurrency can be traded at the price of $2.04 on Kocoin and Gate.io exchanges and is ranked 683 with a market volume of $17 million. This cryptocurrency can be stored in all wallets that support the Ethereum blockchain, including Metamask and TrustVault.
What is the future of Polkadex?
Above, we learned about the advantages of Polkadex; This project has advantages that can separate itself from competitors. But from another point of view, it also has disadvantages, the development of this project has been very long and this issue can reduce the attention of users towards this project, from another point of view, it has not been widely used and cannot be related to the potentials of this project. He gave a definite opinion. But in general, this project has good goals and if it can reach these goals, we can be optimistic about its future!
What is Polkadex writing? Introduction and how to work with the Polkadex decentralized exchange for the first time on the Wallex blog. appeared.
