Less than 48 hours after Cryption Network launched PolyDEX on Polygon, the DeFi protocol now manages over $2.7 million in Total Value Locked (TVL).
According to data on September 10, the platform is finding traction as users shift their digital assets from Ethereum to provide liquidity in the instant, gasless, and cross-chain farming-enabled protocol.
PolyDEX Allows for Single Click Cross-Chain Farming in Polygon
Cryption Network–a decentralized platform formed to resolve pain points facing DeFi– is forwarding PolyDEX as one of the first in the sphere.
The DeFi protocol, unlike competing solutions like Uniswap or PancakeSwap, for example, would, for the first time, allow users to provide liquidity from Ethereum through a single click.
Besides, PolyDEX utilizes the scalability of Polygon, allowing gasless transactions in a highly scalable environment.
In Ethereum, despite it being activity dense, users have to contend with high Gas fees of over $30 to post a single transaction. This fee could be higher depending on the complexity of the enabling smart contract.
The PolyDEX Ethereum-Polygon Bridges
Notably, Ethereum users can shift their digital assets, including ERC-20 tokens and NFTs, through PolyDEX’s bridges. Enabling this, PolyDEX utilizes two bridges—both of which demand the mapping of assets– for instant transfer and activation of single-sided cross-chain farming on Polygon.
The POS Token Bridge utilizes audited smart contracts for asset transfer between Ethereum (root chain) and Polygon (child chain). Unlike Plasma bridges, the POS Token Bridge is more flexible without lockup periods. Additionally, it is comparatively secure than other alternatives. The bridge is secured by Polygon nodes and further by a “robust set of external validators.”
The second is their implementation of the State Sync Mechanism and FxPortals, ensuring seamless decoding of metadata between Ethereum and Polygon blockchains.
How Fund Transfer from Ethereum Works
To farm and receive LP tokens in Polygon, a token holder in Ethereum must first indicate the pool they want to supply liquidity and farm in Polygon. Once this information is received, smart contracts process them and generate the necessary metadata. At the same time, this also triggers the porting of assets from Ethereum to Polygon via the Intermediator contracts.
The metadata generated initially triggers the FxPortals, moving it from Polygon from Ethereum. After the state sync, Polygon validates this transaction once those funds are deposited to add liquidity, generating LP tokens which, in turn, triggers PolyDEX’s core farming contracts.
PolyDEX Farms: Rewards, Vesting, and Lockups
PolyDEX has stated that their farms would improve asset liquidity. At the same time, they cushion against impermanent loss. The protocol allows users to supply a single token and earn rewards from their liquidity provision without necessarily having to deposit two—or more tokens—in a pool. The protocol has stated that each pool will have a multi-token reward functionality, and a deposit fee may apply.
PolyDEX’s Core Farm supplies liquidity to popular assets like stablecoins, ETH, MATIC, and BTC. Meanwhile, Multi Reward Farms distributes multi-reward tokens for users who have staked their assets. There is a wait time of 24 hours for all harvested rewards to prevent users from continuously liquidating their tokens.
At the same time, 75 percent of all rewards are automatically sent to a reward manager, where they are vested for four months. The remainder is sent to the harvester after the 24-hour lockup period elapses. However, users who want to receive their claims immediately without vesting will only receive 65 percent of their total rewards since the rest are burnt.
PolyDEX plans to introduce a deposit fee on stakers where rewards will be distributed in CNT, the PolyDEX token. Collected fees will be used to buy more CNT from the secondary market, where a portion will be burnt. The rest will be distributed to the staker and the developer address.