What is Polkaswap (PSWAP) | What is Polkaswap coin | What is PSWAP coin

Polkaswap is a DEX designed around the interoperable DeFi future, so it has always been a part of the plan to bring together as many assets from as many chains as possible. Polkadot will greatly simplify this by providing a Host relay chain, a cross-chain message passing protocol ( XCMP), and shared protected runtime execution enclaves ( SPREE). However, to fully take advantage of these technologies, it will be needed to connect to the relay chain as a parachain.

Parachains can be thought of as prime pieces of real estate where independent economies can operate, complete with their own native tokens if desired. These specialized chains run parallel to, and are fully interoperable with, the rest of the Polkadot network via the secure passing of messages with the relay chain. Thus, it is important to secure a parachain slot for any player who wants to execute custom computations, store their own data, and/or operate their own economy within the Polkadot ecosystem, without resorting to paying hefty fees.

Kusama is a faster-evolving network than Polkadot, and as such it will have parachain slot auctions first. After that, Polkadot will have auctions, perhaps at a much later time. Despite their similarities, Kusama and Polkadot are distinct networks and having a parachain slot on one network does not grant you the same access on the other.

Polkaswap vs Ethereum based DEXs

• Multitude of assets existing on numerous chains
• Polkaswap has the capability to go beyond the limits of current Ethereum DEX’s with the opportunity to add tokens from the Polkadot ecosystem as well as from other blockchains to the exchange. In doing so, the traded pairs on Polkaswap are not limited to ERC20 tokens like other DEXs, but can be any blockchain that can be connected to Polkadot.
• Lower gas fees
• On current Ethereum-based DEX’s, gas prices for transactions are especially high and don’t make sense for lower volume traders. Gas fees will be lower using the SORA Network because the core infrastructure which uses Substrate is more scalable than Ethereum and doesn’t use expensive mining for consensus. Finally, the overall Polkadot architecture allowing virtually limitless composability between blockchains, so the economies of scale for transactions volumes can lead to lower costs on the more modern and scalable architecture.
• On-time transactions
• If you are currently using a DEX on the Ethereum blockchain, you will find that these DEX’s are simply too slow as there is a time lag between the time a transaction is sent and the time it is validated. Polkaswap solves this by using Substrate, which is much more highly performant than Ethereum. In the future, the multithreaded and scalable architecture of  Hyperledger Iroha v2, written in high-performance Rust, and its Sumeragi voting-based consensus algorithm, will provide fault tolerance and finality for tens-of-thousands of transactions within seconds, providing Polkaswap users with an experience closer to trading on a CEX than current DEX’s.
• A team experienced in building blockchain fintech
• Decentralized exchange protocols are often built by new and inexperienced developers and stress tested with real money. As we have seen with bZx, Balancer, dFund and FTX who played the BAL distribution, that’s why there are so many “hacks” that game flawed smart contract logic and token economics. With experience developing solutions for central banks and multiple blockchain technologies including Kagome, a C++ implementation of the Polkadot Host and the  C++ Filecoin implementation,  Soramitsu expects to create a framework tailored to interoperable DeFi on public blockchains.

The $PSWAP Token

Polkaswap will have 0.3% trading fees per transaction, like Uniswap. Trading fees are used to buy back and burn PSWAP tokens and new PSWAP tokens are minted to reward LPs. Rewards to liquidity providers start at 100% of burned trading fees and gradually goes down to a flatline at 35% of daily burned tokens after 5 years.

Web3 Foundation Grant

To further build the Polkadot and Kusama ecosystems, Soramitsu, an open source contributor to Polkaswap, received a grant from W3F in the 6th wave of grants for Polkaswap. This grant will help Soramitsu provide a solid codebase for the initial release of Polkaswap, which will be an integral part of the Polkadot DeFi ecosystem. For Polkaswap it is a great joy to be part of the Polkadot family. The grant highlights the necessity of a DEX for the Polkadot ecosystem to carry out the free exchange of assets using a non-custodial solution.

Polkaswap and Sora

Polkaswap exists on the SORA Network, which has its own network and technology, while being closely integrated with Polkadot. The aim of this hybrid solution is to have the best parts of the Polkadot network and technology, while preserving the highest level of focus on a DeFi specific framework.

Since the Polkadot relay chain is not meant for processing smart contracts, Polkaswap should be built on a scalable and robust platform that allows smart contracts that then connects to the Polkadot relay chain. The SORA Network fulfills this need.

What is SORA?

SORA is both a new economic system as well as a network which implements a new way to architect a parachain blockchain that connects to the Polkadot relay chain and ecosystem, with in-built tools focused on DeFi. The SORA Network excels at providing tools for decentralized applications that use digital assets, such as atomic token swaps, bridging tokens to other blockchains, and creating programmatic rules involving digital assets. Besides Polkaswap, one of the main applications running on the SORA Network is the SORA decentralized economic system itself.

SORA NEO: The New Economic Order

SORA acts as an autonomous virtual state, governed by holders of XOR via multi body sortition, where token holders can vote on creating and allocating new tokens for productive uses within its ecosystem. The project has evolved based on macroenomics research and the latest DeFi possibilities and is in the midst of an exciting and innovative token redesign.

SORA Architecture

The SORA Network uses Substrate and includes bridges to many other blockchains, such as Ethereum and Bitcoin_._ The SORA Network will have its own set of validators and is planned to have its own parachains for Polkadot and Kusama.

The SORA Network’s parachain will provide a bridging pallet compatible for any substrate based network. This framework will standardize a direct and secure interaction between Polkadot parachains implemented on top of Substrate and Polkaswap and the SORA network. This design allows bridging with the full security of a connected parachain; while this parachain uses relay chain security, the level of bridge security is intended to equal that of Polkadot relay chain security.

The SORA parachain bridge is quite an innovation for the Polkadot ecosystem, providing a new framework by which to build bridges and parachains connected to the relay chain which we believe could become a new standard. Additionally, any user of Hyperledger Iroha v2 (such as some enterprise use case) will also be able to take advantage of the parachain bridge, right out of the box, and be able to communicate with any substrate chain. This makes it trivial to move assets between many contemporary use cases and the Polkadot/Kusama ecosystems as a whole.

At the beginning, the SORA Network will be fully built using Substrate. However, SORA and Polkaswap will, in the future, take advantage of Hyperledger Iroha 2 framework using Iroha Special Instructions, which is a set of tools to create powerful and composable applications for digital assets. Functions such as creating assets upon certain event triggers, swapping assets atomically, and many more useful functions for DeFi applications are built into HL Iroha 2. The Sumeragi consensus algorithm achieves Byzantine fault tolerant consensus without Proof-of-Work mining, via a voting-based block proposal and finalization approach that can achieve finality within seconds. This means that the possibility of transaction throughput of up to 20,000 tps can be achieved.

This faster consensus will provide a better UX experience closer to the speed of CEXs for Polkaswap users, while the overall Polkadot architecture allows for virtually limitless composability between chains.

Rewards for Participating in the SORA Parachain Auction for Polkaswap

While the exact number of KSM or DOT that are needed to win a parachain slot is not yet known with any confidence, without your support, obtaining a parachain slot for Kusama and for Polkadot will be incredibly difficult. As such, we’ve made sure that the importance of the role you play in obtaining parachain slots is reflected in the generous incentives we’re making available during these auctions.

We are reserving up to 30% of the total PSWAP supply (30 million PSWAP) to reward the community for helping the SORA network win and maintain the KSM and DOT parachain auctions for the first 6 years. After 6 years, it will be up to the SORA Parliament to finance future parachain leases.

Though the specifics can change as we find out more details, we would generally like to use up to 10% of PSWAP (10 million tokens) to distribute proportionately to community members who agree to bond their assets for two years during the upcoming KSM and DOT parachain auctions, with the specific amounts decided at a later date.

In the case our bid does not win the auction, contributor tokens will not be locked up and PSWAP will not be distributed. In this scenario, we will repeat the process at the next scheduled auction until we are successful at securing both of our desired parachain slots.

FAQ

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Disclaimer

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 cross chain AMM-DEX protocol for swapping tokens based on the Polkadot (and Kusama) network(s),  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.

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. 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.

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