PancakeSwap evolves – PancakeSwap a decentralized exchange platform that emerged on the BNB Chain following a fork from Uniswap. From now on, the platform is evolving with the announcement of the launch of the version 3 on the networks Ethereum and BNB Chain.
PancakeSwap unveils its V3
PancakeSwap is a decentralized exchange that was launched in September 2020 on the BNB Chain.
Since then, she has established herself as leader on the Binance chain. Indeed, the protocol witnesses over $100 million in daily volume.
Almost two years after the launch of version 2 of the protocol, the PancakeSwap teams come to announce the arrival of version 3.
Thus, this new version is now available on the BNB Chain as well as on Ethereum.
In practice, this one is based on a fork of Uniswap V3. However, the PancakeSwap teams have made some changes to it.
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More competitive transaction fees
First, this new version of PancakeSwap is experiencing a significant change in the fee model. The previous version, V2, offered only one step of 0.25%.
For its part, PancakeSwap V3 introduces four tiers of transaction fees :
“It is important to note that these fee tiers are not mutually exclusive, as each pair of tokens can have a pool of liquidity for each fee tier. However, asset pairs will tend to gravitate towards the fee level where the incentives for LPs and traders align more closely. »
This approach aims to ensure a balance between traders paying the lowest fee tier and maximum liquidity incentive from liquidity providers.
Improved capital efficiency
Like Uniswap V3, PancakeSwap V3 is the subject of a significant improvement in terms of capital efficiency.
Thus, liquidity providers will now be able to take advantage of concentrated cash. In practice, this allows capital to be concentrated in smaller price ranges, resulting in higher fee gains for the same amount of deposits.
“With V3, liquidity providers can now ‘focus’ their capital on smaller price ranges, i.e. choose a custom price range. By doing so, LPs are able to “concentrate” their capital in ranges where most transactions take place, thus making their money work more efficiently. »
In other words, the same amount may generate more costs thanks to the concentration of cash.
VIP program and position manager
In the near future, PancakeSwap V3 will introduce two new features: a rewards program for “VIP” traders as well as a position manager.
On the one hand, the programme VIP is a tiered system that rewards active traders with exclusive benefits. For example, they will have the possibility of obtaining up to 5% discount on transaction fees.
On the other hand, the position manager will facilitate the deposit of cash and to optimize the position based on fees and rewards over time.
« […] Allows users to easily deposit cash with just one click. This built-in tool eliminates the need for manual calculations or third-party integrations, allowing users to automatically adjust their positions and earn commissions while staying within range. »
an avalanche of new features which could further widen the gap between PancakeSwap and its competitors on the BNB Chain.
For its part, Uniswap, the leader of DEXs, was deployed on March 15 on the BNB Chain. This deployment follows long debates concerning the method to be adopted.
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