Polkaswap — a decentralized exchange focused on the interaction between different blockchains and integration with Polkadot. It is a non-custodial exchange based on automated market making (AMM) created specifically for the Polkadot ecosystem and the future of interoperability. Polkaswap aims to provide liquidity, security, convenience, and a user-friendly interface for instant asset exchange.
Comparing Polkaswap with Ethereum-based DEX
To see the specific advantages of the decentralized exchange Polkaswap, it is worth comparing its functionality with resources on the Ethereum blockchain.
- Wide selection of assets from different networks
Polkaswap expands the capabilities of existing DEX on the Ethereum blockchain, offering the addition of tokens not only from the Polkadot ecosystem but also from other blockchains. Thus, trading pairs on Polkaswap are not limited to ERC20 tokens, as on other DEXes, but can include any assets compatible with Polkadot.
- Low transaction fees
On existing DEXes in the Ethereum network, gas fees are particularly high, making them unprofitable for traders with a small volume of transactions. Using the SORA network reduces fees thanks to the use of Substrate as the underlying infrastructure, which provides greater scalability compared to Ethereum and does not require expensive mining to achieve consensus. The Polkadot architecture, allowing unlimited combination of different blockchains, contributes to lowering transaction costs on a more modern and scalable architecture.
- Delay-free transactions
Using DEX on Ethereum, one may encounter delays in transaction confirmations. Polkaswap solves this problem by using Substrate, which significantly surpasses Ethereum in performance. In the future, the multi-threaded and scalable architecture of Hyperledger Iroha v2 on Rust and the consensus algorithm based on Sumeragi voting will ensure stability and immediate confirmation of tens of thousands of transactions per second, bringing the user experience of Polkaswap closer to trading on centralized exchanges (CEX), unlike existing DEXes.
Architecture of Polkaswap
Polkaswap is a DEX located on the SORA network, which is closely connected to Polkadot and aimed at enhancing interaction within DeFi. SORA represents a new economic system and blockchain network specialized in DeFi tools such as atomic token swaps and bridges for transferring tokens between blockchains.
The DEX has its own token. The PSWAP token was created by the community decision and serves both as a governance tool and a means to reward participants providing liquidity on Polkaswap. As a distinctive feature, unlike many other reward tokens, PSWAP is destroyed in the process of transactions, leading to a reduction in its total circulation.
| Parameter | Description |
|---|---|
| Trading Fees | 0.3% per transaction, comparable to Uniswap |
| Use of Fees | For purchasing and burning PSWAP tokens, as well as for issuing new tokens as LP rewards |
| LP Rewards | Start at 100% of the burned fees, gradually decreasing to 35% daily after 5 years |
The future of DeFi that lies ahead of us is characterized by interoperability, scalability, and endless composability.