Several new technologies have sprung up in the crypto space, leading to exciting new projects. As a result of this, the DeFi space is seeing an increase in the number of new projects. In addition, decentralization powers the DeFi space, expanding on the use cases of blockchain technology and allowing simple actions like transferring funds to more complex uses.
Ethereum dominates the DeFi space, with a majority of projects set up on its blockchain. As a result, Ethereum based decentralized exchanges (DEXes) have gained a foothold in trading, with DeFi users utilizing them to execute trades. The preference for DEXes has seen them take a significant chunk of market share from centralized exchanges. They are also seeing an influx of new users hoping to take advantage of the unique features offered by DEXes.
What Are the Problems Faced by Decentralized Exchanges?
DEXes have a couple of problems that, unless resolved, could see traders look for alternatives such as Layer-2 solutions or switching to different chains entirely, such as the Binance Smart Chain.
Users on decentralized exchanges sometimes end up paying extremely high gas fees to make a trade. The increased fee involved can sometimes prove a deterrent for traders and stop them from trading entirely.
While convenient to use, Dexes lack advanced trading features such as price charts, which prove to be a hindrance in trading.
What Are the Features of Polkaswitch?
Interoperability: The platform unleashes asset variety by enabling cross-chain communication between multiple networks.
Cross-chain liquidity: Polkaswitch enables frictionless liquidity for crypto assets, capturing value for traders.
Community driven: Polkaswitch is a community-driven protocol that users govern on its platform and its liquidity providers.
How does Polkaswitch Work?
There are several DEXes that users can choose from, which could be a tad overwhelming. In addition, traders are often left wondering which DEX has high liquidity and the best prices for them. Again, this could lead to traders being overwhelmed with information. This is where Polkaswitch comes in, aggregating information and presenting it to the traders in an easy-to-understand way.
Polkaswitch gives its users a seamless User Interface, allowing them to easily find whatever information they may need in an instant. The protocol provides its users access to DEXes based on Ethereum and Polkadot, which means that users now have more options and access to lower fees.
So how does it work? It utilizes smart contracts and gives users the best token prices directly from DEX liquidity sources. The platform’s partnership with Moonbeam ensures that the platform will be able to facilitate cross-chain communication easily.
Apart from the Moonbeam partnership, PolkaSwitch has also announced a partnership with the Manta Network; this partnership will help provide better liquidity, tackle specific problems and weaknesses in DeFi, and help achieve decentralized cross-chain trading.
Polkaswitch has lined up several more partnerships with the goal of enabling further developments of the protocol.
With the conclusion of its successful seed funding round, Polkaswitch has set its eyes on the rest of 2021 with an extremely clear roadmap. The protocol’s roadmap for 2021 includes the launch of its testnet by May 2021. After the launch of the testnet, Polkaswitch will focus on the launch of its mainnet, user onboarding, Ethereum bridge integration, and final product launch.