Incognito pDEX: How it works and how to use it

UPDATE (11 December 2019): Now anyone can be a liquidity provider! For instructions on how to add your own pair or supply liquidity for an existing pair, scroll to the bottom of this article.

pDEX is a different kind of exchange. It’s non-custodial (which means your money is actually yours), it’s decentralized (built entirely on-chain), and because it’s powered by Incognito — it’s completely anonymous, of course.

It also facilitates instant matches by means of an automated market-making mechanism (more on this in a bit), and offers a chance for anyone to become a liquidity provider and earn a percentage of trading fees.

pDEX is the privacy-focused, inter-blockchain and instant-matching rendition of Nick Johnson and Vitalik Buterin’s conversations on Reddit circa 2016, and Hayden Adam’s implementation of Uniswap in 2018.

Let’s get to it.

How to trade with no order book

On exchanges like Binance and Coinbase, liquidity is provided by market makers who specify prices at which they are willing to buy or sell. On pDEX, trading occurs within a pool. Liquidity providers contribute even liquidity to both sides of a trading pair, and the pDEX mechanism automatically adjusts the exchange rate of every trade to keep the pool values at a constant. Want to dive a little deeper into the mechanics? Refer to the technical overview.

To access pDEX, simply open the Incognito Wallet and tap on the pDEX icon at the bottom of your screen. Expand the dropdowns to see the trading pairs available, and select the currency you want to trade (From), and the currency you want to receive (To).

As of December 11 2019, these pairs are currently trading on the pDEX:


More pairs will follow, and we hope you’ll create your own pairs too. To learn more about what it looks like to be a liquidity provider, scroll to the end of this article.

Deposit funds to start trading

To start trading, first you’ll need to deposit funds into your Incognito trading account.

1. Tap ‘Deposit to trade’.

2. Select the account you want to deposit funds from.

3. Then customize the network fee if you wish. As usual, higher network fees result in faster transaction times.


4. Make sure everything is in order, then tap ‘Deposit’. Your trading account balance will take a couple of minutes to update.

Perfect. Now you’re ready to start trading.

Note: If you are making a deposit from an external wallet (not an Incognito wallet), you can choose to streamline the process by depositing funds directly to your pDEX account.  

How to trade

So how do you make 100% confidential trades without an order book? It’s simple.

1. Select the trading pair you’re interested in.

2. Enter the amount you would like to trade and the algorithm will determine what you’ll get for it.


3. Customize your trading fee or leave it as the default.

On pDEX, everything is market-driven, including your trading fees. Here, you’ll see a fee suggestion based on recent averages, but you’ll also be able to tap to customize how much you would like to pay. The higher the fee, the faster your order will process. You are always free to select a lower fee, but the trade may be delayed.


Just tap ‘Trading Fee‘ to customize it.


4. Enter the minimum amount you will accept for the trade.

This is to account for possible movements in price while the trade processes. If the amount falls below the minimum you will accept, the trade will fail. If the price moves in your favor, you’ll receive the full amount, not just the minimum indicated.


A key benefit of utilizing an automated market-making mechanism is that all matches are instant. Exchange rates are dynamic, and will fluctuate depending on the ratio of currencies in the pool.

So if you see a rate you like, be quick!

Trade initiated!

Most trades will be successful, and your balance will update in a few minutes. In rare cases, network fees or trading fees will be insufficient, and you might have to initiate the trade again with adjusted values. Now, either continue trading, or withdraw your funds from your trading account.

How to withdraw

1. Tap the menu on the top right and select withdraw

2. Select the account you’d like to withdraw pDEX funds to

3. Choose the token

4. Enter the amount

5. Select the network fee or use the default

6. Then tap ‘Withdraw’


Success! You just made your first 100% confidential trade.

Now, what if there isn’t quite enough liquidity for your preferred trading pair? Or maybe that preferred trading pair isn’t listed?

Take things into your own hands.

How to become a liquidity provider 

To contribute to an existing pool and earn trading fees, you’ll have to provide even liquidity to both sides of the pair to ensure the ratio is maintained.

1. Choose the pair you want to contribute to
Just select the coins from the dropdown menus. Let’s take the existing PRV/pUSDT pair for example.

2. Enter the amounts you want to contribute
If you want to supply 100 PRV, you must also supply the indicated requirement in pUSDT. If you supply X% of the pool’s liquidity, you’ll earn X% of its trading fees.

 You can also make a new trading pair available by starting a pool. As a liquidity provider, you can add any pair you like — including native Incognito tokens.  If you are the first to contribute that trading pair, you’ll set the exchange rate – the amounts you deposit will determine the initial price.

How to add your own pDEX pair

1. Tap on ‘Pool’

2. Select your coin pair
Tap to browse the coin dropdown lists. If you don’t see the coin you want, just search its ticker or name.

2. Enter the amounts you want to deposit

3. Tap ‘Add liquidity’


If you supply 100% of the pool’s liquidity, you’ll earn 100% of its trading fees. Anyone can add to your pool (and remove from it), so these numbers will vary. If your contribution amounts to 50% of the total pool, you’ll earn 50% of its trading fees.

You’ll receive these fees when you remove your contribution and exit the pool. If you’d like to withdraw a liquidity contribution, you need to remove your shares from the pool first.

How to remove liquidity

What exactly are shares? All liquidity providers receive shares that represent their contribution to the pool .

1. Select ‘Remove Liquidity’ on the top right-hand corner of your screen.
Your shares are indicated just below it.


In the above example, you own 100% of the pool, so you own 100% of the shares. At the current pool size, the total shares available are calculated according to the formula below:

(10*1,000)*1,000,000 = 10,000,000,000

So if you want to withdraw all your shares (and all your coins), just:

2. Enter the total amount of shares shown

3. Then tap the ‘Remove liquidity’ button at the bottom of your screen


Once you remove liquidity from a pool, those funds will return to your pDEX wallet. Give your balance a couple of minutes to update.

That’s pretty much it! Ready to start trading?

Access pDEX from the Incognito wallet

Download for iOS

Download for Android

Connect with the community on Telegram @incognitochain, and send questions and comments our way!

For more specific or technical questions, reach the team at @incognitonode, or send us an email the good old fashioned way at [email protected]

Spread the love

Leave a Reply