This is a homework post for professor @allbert .
Polkadot is a network protocol that is interoperable and can transfer data between different Blockchains. It was created by "Gavin Wood" In between 2016-20. It has relay chains that act as the primitive security layer, which provides security to its sub-chains.
DOT is the native token used in the Polkadot environment. There are many projects in the Polkadot environment like a centrifuge, Edges, Acala, Moonbeam and many more.
For this project, I will use Polkastarter.
It promotes decentralized finance:
The Polkastarter protocol is a DEX(Decentralized Exchange) platform built to raise capital using cross-chain token pools and auctions. As this new world of crypto is leaning more towards decentralized systems and finances, which are unique in their own way as they're permissionless and transparent, it is very easy to raise funds easily and quickly.
With this, the pool creators can launch fixed swaps for the new tokens in a DEX environment. Also, the liquidity providers can earn and use these new tokens for transaction practices.
With this feature, the users who hold the POLS token or any token relative to their environment have the right to vote for the product features, auction types, token utility etc.
They can also take part in deciding which project will be featured by Polkastarter in future. In short, we can say they have the right to vote on decision making for the Polkastarter.
By using Polkadot Enviourment, It gained large Scalability. As Scalability is the ability of a blockchain to counter a large number of transactions and Data flow with an incrementing number of network nodes, Polkadot uses Parachain technology which helps to transfer data between blockchains and have a far better transaction speed.
Ease of Access:
The Polkastarter environment is very easy to use, or we can say it's user friendly. One can go directly to the Polkastarter website and be a part of the environment with ease.
Powered by Polkadot:
Polkastarter was firstly launched on Ethereum environment, and after going live, it proved its worth by powering projects with DEX and IDOs services. Due to some limitations with Ethereum Networks, it was moved to the Polkadot environment, known for its Interoperability and fast transactions using parachains.
A Better option than Ethereum:
As Ethereum has its limitations, like long trade execution time, a large amount of trading fee and also high slippage probability, to solve all these issues, the Polkastarter changed networks from Ethereum to Polkadot.
Fast Transactions & Low Transaction fee:
Polkadot is interoperable and has Parachains, which are excellent for processing transactions at a relatively faster speed, charge low transaction fees, and are more immune to slippage. Using these properties from the Polkadot,polkastarter gains the upper hand in DEX and decentralized services.
As I've explained above, the polkastarter has many applications and reasons behind choosing it. I think it has the potential to grow and reach new heights in this world of cryptocurrencies and decentralized finances.
Polkastarter's offers some great features like fixed swap smart contract, which allows new projects to easily launch liquidity pools that execute orders at a fixed price — rather than using the AMM model, which takes a lot of time in processing and a large sum of transaction fee due to an Ethereum based network working on uniswap.
With Polkastarter, the projects will be able to raise funds and offer tokens in a very convenient way. It also allows ERC-20 standard tokens to be exchanged within the environment as it was firstly launched on the Ethereum network.
It is a platform that is designed as a cross-chain token pool and auction launchpad. In short, we can say that it helps to boost or promote the token pool by performing auction events and IDOs and ICOs. It is made so that users can use it with ease without any complex mechanisms and terms.
It is generally used by underdeveloped blockchains that aim to raise capital and perform token distribution simultaneously.
With Polkastarter, the new underdevelopment blockchain projects can make their token swap pools with different chains or cross-chain swap pools. This feature allows these new blockchain projects to raise capital with security, and it's a win-win situation for both developers and investors.
There are good risk management features when using Polkastarter. It executes the transactions and swaps by using smart contracts, known as self-executing programs and cannot be altered easily, which backs up its security features.
POLS is the native token used in the polkastarter environment. It is a multipurpose token that can be used for different activities within the same environment like IDO offerings, Liquidity mining, Governance. It ** transaction fee payments** and other payments within the environment.
The platform was founded by Tiago Martins and Daniel Stockhaus. These are the people who work for different companies and came to terms with creating a decentralized platform that can help projects to raise capital for their projects in the crypto industry using cross-chain pools.
The exponential growth in the initial exchange market has skyrocketed after Defi came to market. It targeted events like IDO offering events that promote permissionless transaction systems.
The project was first launched in beta version on the Ethereum network, which performs Initial dex offering through uniswap and uniswap. The whole system seemed to adopt the Defi solutions with far more successful projects than Centralized finance systems. It brought trading volume in billion figures in the crypto market and took the market share from CEX(centralized exchanges).
The whitepaper of the Polkastarter explained in detail about the platform. It showed the exponential market growth in trading volumes for decentralized trading platforms after 2019. According to the whitepaper, the growth was 1100% as compared to the previous year. It stated that the Dex volume had reached a $5.1billion level, five times the sum of the first six months of the year 2019.
And after that, the aggregate trading volume for decentralized exchanges skyrocketed to a mark of $11.6 billion. With this growth, we can get an idea of how much enthusiasm was there at that time for the decentralized finance applications.
Then Polkastarter was introduced, which was a decentralized finance platform built of cross-chain token pools and auctions. This enabled new projects to raise funds through an interoperable environment that was based on the Polkadot network. Offering features like Interoperability and decentralized finances with Polkastarter.
The Polkastarter was launched with the vision that it'll help startups and projects to raise capital on the Polkastarter environment, which is interoperable in nature and supports decentralized infrastructure with other applications like Auctions, IDOs, and OTC deals with whitelisted addresses.
It offered features like Cross-chain swaps by which transactions could be done with different chains and fixed and dynamic swaps, which sets fixed interest rates for project developments. Permissionless listing, governance model and other privacy and security features.
Polkastarter was created akin to the uniswap platform, which provides IDO offering to the users and new projects. But as Uniswap was based on Ethereum Network, it had issues like low transaction speed and high fees. Polkastarter introduced features that any other of its contenders could not provide, like cross-chain transactions and governance rights, Scalability, fixed and Dynamic pools.
As you can see from the Image Above, the Polkastarter was in its own league and allowed such features that the others could not.
For the platform, we can visit the Polkastarter website and see the options and services available.
- On the homepage of the Polkastarter, we can see the options as to see upcoming projects and subscribe to new projects. In addition, there's a connect wallet option on the top right corner of the website and it can support Binance smart chain wallet, Ethereum wallet.
- When you scroll down on the homepage, you'll find the upcoming projects which will show the newly funded projects and it'll also show if the whitelist is open or closed for taking part in these upcoming projects.
- After that comes Polkastarter about section. It gives information about the basics of the Polkastarter. Like how to participate in IDOs and how to buy POLS tokens and some other useful info.
- A little below the about section, you can see the funded projects section. These are the new projects whose IDOs are complete and this will show the total raised capital and total funded projects.
Polkastarter is a Decentralized exchange platform built for cross chain pools and auction services providing new projects an environment to launch their product and services.
These services are used to raise capital for further project development, through IDO offering events. It raises funds from communities of retail and professional investors. With a environment like polkastarer, which provides good security measures and fast transactions at low fees gain a strong fundraiaing and tokenswap services.
The transactions are based on smart contracts which automatically execute the transactions when certain conditions are met and also they're a digital computer algorithms that cannot be altered. The exchanges on these platforms are at fixed rates, this allows the easy launch and creation of liquidity pools which later execute the orders at fixed prices and also the token will have a fix value for the time of the offering.
Uniswap uses AMM models which relies on automative price matching. AMMs are used to directly interact with another user for swapping one token for another. But that's not the case with polkastarter.
Polkastarter don't limit the token sale for users. This was one of the main reasons why it was integrated with the polkadot environment. As polkadot supports fixed exchange groups because of distribution mechanism.
There are also some mechanisms by which the polkastarter works:
It is the property of the polkastarter platform with which a user can stake or lock up tokens for a period of time which will provide some amount of utility time the network and get staking rewards in exchange. With the polkastarter token i.e POLS token,one can get rewards by staking.
It is also for pool rewards, liquidity providers on the network are eligible for these stake services.we can understand it in simple way as, when the pool is created in polkastarter, the one who created the pool will pay a fixed fee for the total raised amount and some percentage of this fee goes to stakers of POLS.
These rewards then will be distributed in cycles which are pre-determined at the time of creation of pool. If a user holds 1% of the total staked tokens during it's cycle then he will get an amount equivalent to 2% of all staking rewards for that same time period.
We can understand it like that, if I am a user and the platform generated 1000 tokens as stake rewards, then I'll get a amount 1% as rewards. I.e 10 tokens in rewards.
One point must be noted that the users on the network the only allowed for staking after they provide liquidity to the pool. And those users who provide liquidity to the pool are known as contributors.
In a short way we can say that the mechanism works in following way :
- first you get incentives for liquidity provision and then the access to rewards pools and then you have governance rights.
- Also we can see from the above images, the working mechanisms of the Polkadot which powers the polkastarter network.
In Applications we can count the Governance provided by the polkastarter platform to users.
it also helps raise capital to the new projects which helps them to further develop their ideas for the betterment of future.
Staking also provides users with rewards.One can get rewards from staking.
Under this section, the whitepaper of the Polkastarter clearly defined its roadmap for future development.
The roadmap overview for 2020 and 2021 stated the following terms:
- Q4 2020(MVP): it was the launch of the platform where the developers of the platform introduced the permissionless decentralized environment which supports features like permissionless listings, fixed token swaps, private pools and security measures with high slippage alerts.
Q1 2021(Polkadot): The Polkastarter network migrated from Ethereum network to Polkadot environment for new technology implementation in which it can do cross-chain transactions and some other security up-gradation features.
Q2 2021(Governance): the event when the Polkastarter presents a sealed-bid auction governance model in which the governance rights will be given to the stakeholders by which they can vote for platform degradation.
- Q3-Q4 2021(DAO): The new version of the Polkastarter platform. This is gonna be version 2.0 with a full Working DAO.
Although these are the steps which were mentioned in the whitepaper of the Polkastarter, there are some other aspects to it. As the Polkadot based token pools are not yet functional at that time. The initial technical roadmap was released which outlined the future plans for the Polkastarter in 2 phases:
Phase 1 was the launch of the product on the Ethereum network and this phase was created so that the swap and Dynamics of the token sales can be tested and have some user feedbacks to prepare a robust model which can be migrated to the Polkadot environment in future.
Phase 2 was the launch and working of the same Polkastarter to the Polkadot network, it enabled the Polkastarter to build capital in any Polkadot based token. The plan was to create cross-chain pools and token sales via auctions with taking advantage of some big tokens such as BTC, USDT And ETH.
We can also differentiate these two phases on the basis of their events :
- In the first steps of phase 1, the first version of the Polkastarter was launched i.e Polkastarter v1.0, on the Ethereum network in beta mode. It supported permissionless listings and liquidity mining with key token swap Infos and smart contract details.
It also contained anti-scam features like smart contracts which are digital Algorithms for transactions.
- Phase 2 was the launch of version 2.0 of the Polkastarter i.e Polkastarter v2.0, which included both Multi chain token pools from Ethereum and Polkadot and features like governance and staking. And after that in phase 2, Polkastarter v3.0 was introduced with cross-chain token pools and swaps. With the power of Polkadot enhanced features like dynamic ratio swaps.
Above are the listed projects associated with the polkastarter project.
DIA: it is a project associated with the polkastarter and provides services related to pricing, Defi trading and other anti slippage features.
Orion protocol: It provides Automated liquidity provision.
Moonbeam: This is a partner of the polkastarter project and supports its cross-chain interoperability.
Shyft: It is also a partner of the polkastarter project, it is a public blockchain protocol that uses encrypted data transfers and enables infrastructures for app developers.
Covalent: It provides anti-Scam measures to the polkastarter network making it more secure for projects and fundraising events.
- Currently, Polkastarter is launching new projects and events for the new projects on the platform and raising funds for the same through IDO events.
we can see the current activities through different social media platforms and web pages.
POLS token is the native token used in the Polkastarter environment. At the time of making this post, the current details of this token are as follows:
Token Name - Polkastarter (POLS)
Rank - #195
Market Cap- $263,627,444
Fully Diluted Market Cap - $308,523,995
Volume(24h) - $54,671,650
Volume / Market Cap - 0.1878
Circulating Supply - 81,301,332.00 POLS
Max Supply - No Max Supply
Total Supply - 100,000,000
As you can see in the picture above, the price trend of asset in 1 day time frame. I applied 1 day time frame to analyze because I want to invest in asset for a long time period.
In picture you can see the recent highest price of asset is in Feb 2021, after that price of asset sees a downtrend because of global sell off. And from some time price of asset is moving in a range, means moving sideways.
- If you take a closer look at 1 day time frame chart of asset, we can see that price of asset is facing resistance level at approx $2.2 level from last 4-5 months. But the price of asset breaks this resistance levels recently and holding its gains. I also applied MACD indicator which shows an bullish trend in the price of asset. You can see the siganls of MACD indicator in bottom of chart. So, I made a buy side trade in asset. I get the asset at very discounted price as the current price of asset is approx 2.5times away from the recent highest price of asset. So, I think asset has very good potential and also breaks recent strong resistance levels.
- To purchase the POLS token. Follow the steps below. I'm using the Binance mobile App for this.
- First, Go to Binance mobile app and click on markets, then Go to the search bar and search for the token you want to buy. In my case, I've chosen the POLS token with USDT pair.
- Then, After Selecting the Token Pair, click on the buy button and fill in the details and amount of the token that you want to buy, and after filling in the details, click on the buy button.
NOTE- You can also select the type of order like market order at market price or a limit order. In my case, I've filled a limit order according to my needs.
- The order will be filled, as you can see from the image above, and you can view this in the transaction history panel.
Polkadot is a powerful tool that enables users to get numerous advantages over other networks. It promotes decentralized finances and has para chains technology.
It provides interoperability to the projects which operate under its environment. It allows developers to create Blockchains within its ecosystem while maintaining all other chain links.
With this report, I am certain to say that the Polkadot is a far better option for the polkastarter platform as compared to the Ethereum network and can say that it's shaping the future of Blockchain technology.