On May 21, Polkaswap joined in PolkaWarriors’ AMA and revealed many special things about Polkaswap - The DEX for the Interoperable Future.
Polkaswap.io is a DEX for the interoperable future of Polkadot. It uses the SORA’s token (XOR) as a main token for transaction fees and liquidity provision. It also uses the SORA tokenomics to help boost liquidity to fulfill trades in a fast and efficient manner. The goal is to create an extensible and decentralized token swapping paradise, so you can trade with style.
This AMA was held with the participation of Makoto Takemiya - Co-founder & CEO of SORAMITSU. Many interesting questions about the products of Polkaswap were answered by Makoto.
Below is a summary of the outstanding questions and answers from the AMA session.
1. Every successful project has a few stories behind the scenes, what's the story behind Polkaswap's success? What was that vision when it first emerged as an idea? Are there any special prototypes or upcoming Polkaswap updates that you want to share with us?
That's a great question. We have been collaborating with the Web3 foundation since 2018, and received multiple Web3 grants for building the critical infrastructure for Polkadot, namely the Polkaswap decentralized exchange, as well as the implementation of Polkadot in C++. We started building the first Polkadot-based AMM DEX early 2020, and we successfully launched it’s mainnet with an Ethereum bridge on April 27th. The idea behind Polkaswap is that most existing decentralized exchanges have a large number of shortcomings. Be it slow execution of transactions, high fees, low liquidity, or poorly designed UIs. So we wanted to solve many of these shortcomings.
I recently had an interview with Real Vision, where I mentioned many future ideas for Polkaswap and the SORA economic system that we are currently designing. I highly recommend watching the interview yourself. In particular, we are working on the design for synthetic assets. For more information I suggest you follow us at https://twitter.com/polkaswap so you don't miss anything.
2. When will farming on Polkaswap be released and how will it be tested to avoid unnecessary damage?
Farming already exists!, but it is not enabled yet for people to view Polkaswap. However, by adding liquidity of at least 1 XOR, you can already start to earn strategic PSWAP rewards, as outlined in https://medium.com/polkaswap/pswap-rules-everything-around-me-three-pathways-to-polkaswap-rewards-63842caf88c0
3. Will Polkaswap enable cross-chain transactions from DOT to BNB or ETH for example? And what will gas fees look like in that context?
The goal is to become a source-agnostic liquidity marketplace, where users can freely move assets between chains and in the future, will even be able to trade against composable DeFi apps existing on many different networks. True money legos!
4. DEXs are important to DeFi and the daily transaction volume of Uniswap briefly exceeded Coinbase for several days in a row earlier this month. Do you agree with the argument that DEXs are replacing CEXs? And is Polkaswap capable of breaking the limit of Ethereum DEX?
DEXs are for sure an efficiency improvement over CEXs in many ways. Polkaswap uses Parity Substrate as the blockchain technology to power it, as it is created on the SORA network. This allows Polkaswap to be much cheaper and more scalable than Uniswap or even Pancakeswap!
5. I have read that the BTC and BSC bridges are in development on Polkaswap. How is the progress so far? Is there any plan to expand the bridges with other chains?
Polkaswap aims to be a liquidity hub for many different chains, so bridges to all major EVM-based chains, like BSC, Energy Web Chain, Tron, and Avalanche are planned. Also bridges to Bitcoin and other legacy chains are needed to accomplish the objectives.
6. Liquidity, transaction fees, and price slippage are always important factors in DeFi services. How does Polkaswap provide deep liquidity and low transaction fees to attract users?
Polkaswap is built on the SORA network, which uses Parity Substrate as a blockchain platform to deliver cheap transactions at high throughput and scalability. To provide boundless liquidity, Polkaswap makes use of the SORA tokenomics, with XOR as the hub token against which all liquidity pairs are provided. XOR token supply is managed by a token bonding curve, which is a smart contract that mints/burns XOR based on demand for the token, and keeps some other assets in reserves. The liquidity aggregation algorithm of Polkaswap trades against both the user-provided liquidity pools and the token bonding curve smart contract of XOR in order to provide the best liquidity.
7. Liquidity mining is the best way to generate passive income. What passive income strategies does Polkaswap offer to users? Under what network are they operating? What are the objectives set to maintain security, stability and trust for users?
Polkaswap offers 3 amazing PSWAP strategic bonus programs where users can earn PSWAP tokens by:
making more than 500 trades in a month of at least 1 XOR each,
providing liquidity of at least 1 XOR on Polkaswap, and
buying XOR from the token bonding curve smart contract
all explained here: https://medium.com/polkaswap/pswap-rules-everything-around-me-three-pathways-to-polkaswap-rewards-63842caf88c0). These rewards are 64% of the token supply, which means they are a great source of potential revenue for Polkaswap users.
Additionally, to provide trust in Polkaswap, the SORA Parliament insures the Dapp against loss resulting in technical errors or security exploits, by promising to mint and distribute XOR tokens to users if the Parliament deems that losses are due to technical and not user errors. The SORA Parliament is not yet fully set up, but this is planned for the future.
8. What is the plan Polkaswap has to ensure sufficient liquidity on the DEX to fill market orders, especially as adoption increases and clients begin multiplying year-over-year?
Polkaswap has very large incentives for liquidity provision, as 2.5 million PSWAP are allocated daily to liquidity providers for the first 4 years.
9. What is the biggest difference you make in this project?
I try to be the best user of stickers and memes in telegram.
10. A successful project always has a specific community goal, every project should aim at the end goal of people. What benefits does your project bring to this society and is it sustainable?
We want to realize the SORA economic system as a supranational source of democratically allocated capital that empowers small businesses and producers of goods and services.
If you want to join in and help out, first check out the blog articles on sora.org
In the live questions sections, Makoto did answer several short questions from the Polka Warriors community.
1. Recently there have been many hacking or exploits in Defi, how safe is Polkaswap? What measure is taken to make sure such things don't happen to Polkswap as it grows bigger?
Polkaswap code has been audited by Tevora, a security consulting company. Additionally, our internal security team has reviewed the code and we ran a public testnet for 4 months before release.
For any application as complex as Polkaswap, there are still many things that can go wrong. So the SORA Parliament will socialize costs of any problems by minting new XOR, in order to provide a social insurance program for the Polkaswap DEX. In exchange, Polkaswap governance will be managed by the upcoming SORA Parliament.
You can read more about the Parliament here: https://medium.com/sora-xor/the-sora-parliament-af8184dae384
2. Which area are you focusing on at the moment? (DeFi, Stake,Dapps..) and what are your goals for this year ?
We think synthetic assets, backed by XOR, are very important to focus on currently, so this is the main short term focus, in addition to adding bridges to other EVM chains (like BSC!) and Kusama/Polkadot.
3. Can you list some of the features with which you are most confident about your platform? How can you advertise your project worldwide and make it popular?
The tokenomics based around the XOR token are really incredible and the ability to combine user-provided liquidity with the SORA token bonding curve liquidity is really amazing to me. It’s really revolutionary.
You can read more about the model here:
4. Most investors are focusing on the token price with no real understanding of the use cases and long-term value of the project. In this case, what are the benefits for investors in holding PSWAP? Is there any plan to increase demand for PSWAP in the long term?
Actually, we don’t care about focusing on speculators, but rather want to work to build tools with fundamental value.
Towards this end, the PSWAP token design is very unique in that it is deflationary—some PSWAP are burned with every transaction. This can create demand and long term, predictable price dynamics, both of which are very important for users!
5. What does the PolkaSwap project mean What is your desire when choosing a name for this project
Polkaswap is kind of a play on Polkadot and Uniswap. It means Polkaswap aims to be the Uniswap of the Polkadot ecosystem. Because Polkadot is, by its very nature and goals, a multi-chain, anti-blockchain-maximalist universe, Polkaswap aims to be a multichain, universal source of liquidity for users who want to trade any asset!
6. For Crypto education, Do you have a YouTube channel, to guide us how to use your platform?
Admittedly, our platform and tokenomics are quite complex, so we work really hard on education. First, we develop a lot of amazing content on medium: https://sora.org/blog
Second, we make some amazing videos that we put online:
7. How do you plan to attract users, incentivize them in the early stages of deployment?
For Polkaswap, we have 3 $PSWAP strategic bonus programs that give out 64% of the total supply (6.4 Billion PSWAP!
You can read more about the programs here:
8. What is your strongest advantage that you think will make your team leading the market? In contrast, what is your weakness? How do you plan to overcome it?
Our strongest advantage is our understanding of both blockchain technology and macroeconomics. I have been in the blockchain space since early 2013, and my company has built many amazing applications that have pushed the boundaries of blockchain.
To understand our economics more, please check out these:
9. How will you continue to promote your product in the future? Do you already have plans for other interfaces with other companies ?
SORA/Polkaswap are open systems that anyone can freely use and contribute to. That being said, there are already a couple of enterprise applications that are in the pipeline where companies would like to integrate the SORA/Polkaswap APIs to do token transfers and swaps into the Polkaswap.io liquidity pools. Hopefully this will increase user adoption significantly!
10. How does PolkaSwap deal with other DEXs currently obstacles to accessing DeFi services : high gas cost with on-chain transactions, liquidity being fragmented to various protocols and services, trade fee, subpar UI/UX and lack of efficient market-making mechanisms ?
Polkaswap improves on previous DEXs by:
Using the SORA network and not Ethereum or EVM-based technology; this gives us 6s block times and cheap fees that are well under $1!
To solve liquidity fragmentation, we use XOR as the hub token, against which all liquidity is provided against; this makes the trade routing algorithm faster and more efficient, and also concentrates liquidity around XOR so that people can enter/exit at whim. The Token bonding curve of SORA manages the XOR token supply elastically, so new XOR can be injected into transactions to improve liquidity as well.
Our UI/UX is really awesome and we just get better all the time!
Website | Twitter | Telegram