Polkaswap is a non custodial AMM DEX designed uniquely for the Polkadot ecosystem and hosted on the SORA v2 network. Near boundless liquidity through one of a kind Aggregate Liquidity Technology (ALT) with the security and convenience of a DEX. Coming soon.
Polkaswap is an ongoing development, and the following FAQs will continue to be updated as the Polkaswap protocol continues to be enhanced. The technology and structure that will be applied at the launch of Polkaswap may change as research and development progress.
Warning: Be careful and always be on the look out for scams involving people selling PSWAP, XOR or VAL tokens. Always check things through official channels if you have any doubts and avoid risky products like futures or OTC transactions.
What is Polkaswap?
Polkaswap is a non-custodial, AMM-DEX protocol for swapping tokens based on the Polkadot network, Parachains, and blockchains connected via a Bridge. The Polkaswap protocol effectively removes trusted intermediaries and provides the opportunity for faster trading. Polkaswap is open-source software licensed under Apache V2.
How does Polkaswap work?
Polkaswap is a DEX with the possibility to set up multiple liquidity sources under a liquidity aggregation algorithm. When traders call the swap function, the liquidity aggregation algorithm will fill the order using the best offers from liquidity sources. Liquidity sources can be represented as AMMs, order books, or other algorithms. Because Polkaswap is an open-source project, it will be possible to add more liquidity sources as a community by developing inside the Polkaswap module.
Does the Polkaswap DEX have a token?
Yes, Polkaswap does have a token called PSWAP. Polkaswap enables users to create liquidity pools for token trading pairs in the Polkaswap DEX and receive PSWAP: so-called liquidity staking. Trading fees are used to buy back and burn PSWAP tokens, and new PSWAP tokens are minted to reward liquidity providers, but this is done in a deflationary way as more PSWAP are burned than minted. The PSWAP token issuer will be a smart contract that will distribute PSWAP according to programmed logic and to incentivize Polkaswap growth. Additionally, the XOR token will be used for paying network transaction fees. For a more in-depth description, check out the Polkaswap intro article.
Will there be an ICO or private sale?
There are currently no plans to sell PSWAP via an ICO or private sales.
How are you going to distribute the PSWAP token?
PSWAP tokens will be given as rewards to those who join the Kusama and Polkadot parachain auctions. Read more on how you can earn PSWAP through DOT and KSM bondage here. In the course of development, the team will publish more information about the distribution of PSWAP tokens and we will update the community as soon as there is more news.
What is the utility of the PSWAP token?
The PSWAP token incentivizes liquidity providers, utilizing a deflationary model with respect to token supply. The 0.3% fee for every trade in the Polkaswap DEX is used to buy back PSWAP tokens. Part of these PSWAP tokens are allocated to the liquidity providers, and part are burned to decrease the token supply. At first, 100% of bought-back PSWAP tokens are allocated to the liquidity providers, but with time this percentage decreases with the burned tokens.
How is Sora (XOR) used in the Polkaswap protocol?
Polkaswap will be built on top of the SORA Network, and the SORA token (XOR) will be used for gas/fees and liquidity provision on Polkaswap. XOR is a useful token for liquidity provision on Polkaswap because it is stable-ish (minimizing impermanent loss), highly liquid (because of the token bonding curve market maker), and neutral between other Polkadot ecosystem projects, but uses DOT and KSM as reserves.
How are prices determined on Polkaswap?
The Polkaswap protocol design allows multiple liquidity sources per token pair. Every liquidity source will have its own algorithm to determine prices. When a user calls a swap function, the Polkaswap liquidity aggregation algorithm will fill the order using the best offers from liquidity sources.
Is Polkaswap fully permissionless?
Yes! The Polkaswap protocol and traders cannot be censored or allowlisted. The developers cannot technically stop or edit the smart contracts in any way after they have been deployed. Deployment of developed code will be decided by the community and is not the decision of the developers.
What is a Polkaswap pool?
There will be multiple, different pools in Polkaswap. It will start with a classic 50/50 XYK pool, and then add multiple other pool technologies to provide a better trading experience for users. Polkaswap will have a liquidity aggregation path algorithm, which will fill trades according to the best offers using multiple pools simultaneously.
How can I use Polkaswap as a trader?
There are four ways a trader can interact with with the Polkaswap protocol: —Through the Polkaswap DEX front-end (after launch) —Through the Fearless Wallet or the SORA app (after launch) —Directly through smart contracts (after launch)
How can I use Polkaswap as a liquidity provider?
Liquidity providers have two ways to interact with the Polkaswap protocol: —Through the multiple liquidity pools manager front-end (after launch) —Directly through smart contracts (after launch)
Are there risks in using Polkaswap?
The Polkaswap protocol smart contract will be audited, and it is designed with security as its top priority. The code will be audited by a professional firm; however, we cannot guarantee that bugs will not be found in the future. Please do your own research and be careful.