Gem Hunting: Polkadex

Updated: Sep 30, 2021

Gem Hunting is a series where I compile research on interesting small cap crypto projects.

 

Ticker: $PDEX Launched: April 2021 Market cap: $57 million (as of 5/18/2021)

Circulating supply: 1,963,860 Total supply: 20,000,000 Sector: DeFi / Exchanges

What is Polkadex?

  • Decentralized Exchange

  • First orderbook-based exchange in Polkadot ecosystem

  • Built on Substrate

  • Multi-chain compatible

  • Up to 500,000 transactions per second


Unique features

  • No price slippage

  • Zero trading fees

  • Decentralized KYC

  • Fiat on-ramp

No slippage

On-chain market making bots (AMMs) are connected to the trading engine. When a trade is not matched against the order book, the Polkadex Engine will check if these trading bots can make an order that will match. If the bots cannot provide a better price, the trade is executed as a market-making order in the order book. This also eliminates the issue of other trading bots front-running orders by paying higher gas fees.

Zero trading fees Feeless trades are achieved through executing transactions on Polkadex's Layer 2 scaling solution, SubstraTEE. Since the executions are happening off-chain, there are no fees for transfers.


Decentralized KYC

Decentralized KYC is Polkadex's solution to comply with Anti Money Laundering laws. This works by "using cryptographic proof instead of actual user’s data to verify that the participant is not sanctioned by Anti Money Laundering or involved in other financial crimes."


Each user's personal data remains with their wallet which means it is not given out to third parties. Users remain in full control of their data.


Fiat on-ramp

Decentralized KYC allows Polkadex users to buy crypto via credit card or bank account. This will make Polkadex one of the first decentralized exchanges to offer fiat support.

Where can I buy $PDEX?

PDEX is currently available on Uniswap, Kucoin, and Bilaxy.

Risks

The Polkadex team is the biggest question mark of this project. There isn't much information online about each member so it's hard to make a judgment on their qualifications. I recommend checking out their Github to view the project activity.

Summary

Polkadex is setting itself apart from other decentralized exchanges by focusing on bringing the best parts of Defi and Cefi to their platform. It aims to become a parachain in the Polkadot network so that liquidity can easily be brought from the Ethereum network to Substrate. If all their goals come to fruition, I wouldn't be surprised to see Polkadex becoming a big player in the DEX space.


Decentralized KYC is Polkadex's most controversial feature. In theory it seems like a great idea. In reality, it will be interesting to see if traders feel comfortable providing their information to the protocol. If it receives a positive response, this will be the biggest win for Polkadex since there will be an inflow of fiat going directly to the exchange.


Teams can make or break a crypto project. It is still very early to tell whether this team will be able to accomplish their goals but I am hoping to see more face time from them in the form of video interviews and other informational content about the project.


Polkadex Testnet V3.0 is expected to launch in May/June and Mainnet in fall 2021. Evaluating these launches will give the community a good idea of how much progress the team has made. Overall, Polkadex has incredible upside and is in a great position if the team can deliver on their vision.

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