Polkaswap is an open-source, non-custodial, decentralized exchange protocol built on top of the Polkadot network via the Sora Network.

Decentralized finance (DeFi) has grown exponentially in recent months. But while these Defi-based seemed promising, the typical problem with prominent blockchains like Ethereum appears to be a regular concern. Users have been trying to avoid rising gas fees and slower trades on such networks. This is where Polkaswap comes in.

Polkaswap is a DeFi project built on the Polkadot ecosystem exclusively designed to support faster trading without the need for any intermediary to facilitate them. It also offers its users the capacity to earn from their assets by supplying liquidity to its pools, which many refer to as ‘liquidity mining.’


Polkaswap is a project currently under development led by Soramitsu with the support of Web3 Foundation Grant. Soramitsu is a Japan-based blockchain company that is among the biggest contributors to the Hyperledger Iroha project. They have also been involved in financial technology solutions for businesses, universities, and other functions.

Soramitsu, the team behind Polkaswap, built its system on Polkadot to be able to establish its interoperability feature without compromising its ability to facilitate trades faster than any other chain. Ultimately, it was designed to enable the exchange of multiple assets across different chains.

What is Polkaswap?

Polkaswap is an open-source, non-custodial, decentralized exchange protocol built on top of the Polkadot network via the Sora Network. Its primary goal is to facilitate faster cryptocurrency trades without incurring high transaction fees that other blockchain networks suffer from.

As many would say, Polkaswap can be considered the ‘Uniswap’ of the Polkadot ecosystem. It functions as an automated market maker and is deployed on the Sora Network which utilizes the Hyperledger Iroha v.2 technology. Thanks to these features, Polkaswap is able to ensure better liquidity and security for its users.

As opposed to many centralized exchanges, Polkaswap is completely permissionless. No middleman or central authority can control the trades within the network or amend any smart contracts that are already functional. If a code needs to be updated, the decision to implement a revision on a smart contract has to be in consensus among the protocol’s community.

Polkaswap’s Features

Polkaswap facilitates trades with the help of aggregated liquidity. This means that all the best possible offers from the different liquidity pools that are connected with the protocol is collated. There are also more features that distinguish Polkaswap from the usual DEXes. Here are the following:

  • Interoperability

Unlike other DEXes built on top of Ethereum, Polkaswap can add tokens on the protocol even if they are on other blockchains. They only need to be linked to the entire Polkadot ecosystem.

  • Affordable gas fees

Transactions made in Polkaswap are anchored to the Polkadot chain. This means that the gas fees are lower compared with the Ethereum network. SORA Network also supports an infrastructure that utilizes the Substrate, enabling a consensus mechanism that does not require mining.

  • Faster transaction settlement

Again, through the Substrate, Polkaswap can perform better than other blockchain networks. Hyperledger Iroha v2, the technology brought by Soramitsu, is also capable of supporting a voting-based consensus algorithm secured by a fault tolerance system. This makes sure that consensus can be achieved fast without compromising the integrity of the chain.

Polkaswap Pool

Polkaswap has a ton of liquidity pools that users can access through the platform. Initially, it has already rolled out the 50/50 XYK pool, but more pools are going to be opened soon.

To ensure the best prices and smoother transactions for traders, Polkaswap implements liquidity aggregation algorithms. Simply put, it facilitates trades using all the best available pools on the protocol at any given time.

To use Polkaswap, traders have four ways to access the protocol.

  • Polkaswap DEX front-end
  • Fearless Wallet or the SORA application
  • Through smart contracts connected with Polkaswap

If you want to supply liquidity, there are two ways to access the protocol.

  • Connecting with liquidity pool manager front-end tools
  • Through smart contracts connected with Polkaswap

SORA Network

SORA is a parachain network connecting the Polkadot relay chain and its entire ecosystem. Its use cases include tools that enable creating digital assets, conducting atomic token swaps, bridging tokens, and other functions.

Since the SORA Network hosts the Polkaswap protocol, transaction fees will utilize SORA’s native token, the XOR, for transaction fees. SORA is integrated with the Polkadot network through the Bridge protocol.

The reason for using the SORA Network to host Polkaswap is that the default Polkadot relay chain is not capable of processing smart contracts. And since SORA can facilitate the implementation of smart contracts, Polkaswap only needs to be connected with the relay chain in order to be linked with the Polkadot ecosystem.

SORA has its independent set of validators that help the platform reach consensus. In the future, there will be parachains bridging SORA to the Polkadot and Kusama protocols. It also takes advantage of the relay chain security, similar to what the Polkadot ecosystem implements.


PSWAP is Polkaswap’s native token. It can be used for liquidity staking, which means that users can lock up their crypto to supply liquidity in Polkaswap’s trading pairs. In return, they earn more PSWAP as a reward for staking their tokens.

PSWAP tokens are minted following a deflationary model. This means that they generally burn more than they mint. This function is governed by a smart contract that ensures fair PSWAP distribution to support the growth of the platform.

PSWAP is not yet available on initial coin offerings or private sales. However, they can be acquired as a reward for those who are joining the auctions on Kusama and Polkadot parachains. For those who are looking to acquire PSWAP tokens, the development team will keep the community updated about its distribution in the coming months.

Transaction fees

Transaction fees, however, use a different token. For traders, they have to use the XOR token to settle transaction charges. Exactly 0.3% of the fees accumulated from trades performed on the platform is then used to buy back PSWAP tokens.

The deflationary model on the distribution of PSWAP rewards to liquidity providers will function in such a way that a portion of the PSWAP tokens bought back are distributed to stakers, with another portion of it burned. For now, all the PSWAP tokens are completely distributed to stakers but over time, a portion of these will have to be burned.

This is to ensure that the supply of PSWAP tokens in circulation decreases over time, helping sustain the value of the token on a longer-term.


Most exchanges in the cryptocurrency space tout their platform as the best there is without disclosing any potential problem that traders might face in their time of use. And commonly, we hear reports from users of bigger blockchain networks like Ethereum about the rising transaction costs and expensive gas fees they have to pay just to have their trades facilitated.

And despite the new developments DeFi has brought to the blockchain space, our ability to capitalize on these innovations depends on the capacity of the network they are built. If we are talking about high-volume, high-frequency trades, protocols like the Polkaswap is a viable alternative. Not only are gas fees low and transaction speeds faster on Polkaswap, but they are also facilitated on one of the most secure chains in the space.