DeFi

PancakeSwap Launches Version 3 With Attractive Transaction Fees

Key Points:

PancakeSwap’s automated market maker platform, version 3, is now available on BNB Chain and Ethereum.
The update includes improved performance and decreased costs.
PancakeSwap V3 also includes enhancements to the platform’s capital efficiency and a trading rewards program incentivizing traders.

PancakeSwap, a decentralized exchange (DEX) with over 1.5 million unique users, launched Version 3 on the Ethereum and BNB Chain networks, with speed enhancements and cheaper fees.

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A fundamental feature of the update is improved capital efficiency, including a change in how liquidity providers may deploy money on certain price intervals.

PancakeSwap V3 also includes enhancements to the platform’s capital efficiency. They include enabling liquidity providers to focus their money on narrower price ranges, which results in larger fee profits from the same amount of deposits, according to the creators.

The previous version of the DEX dispersed liquidity from providers (LPs) equally throughout the price curve of trading pairs, which the platform acknowledges was inefficient given that assets often move within certain ranges.

V3 enables liquidity providers to offer liquidity by selecting a bespoke price range, giving particular control over capital investments to larger volume trading ranges. The update also highlights the addition of four new trading fee levels ranging from 0.01%, 0.05%, 0.25%, and 1%, a shift from V2’s normal 0.25%.

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Each token pair may have its own liquidity pool for each tier. PancakeSwap anticipates asset pairings to be pulled to levels where LP and trader incentives coincide, with the method attempting to strike a balance between traders seeking the lowest costs while also encouraging LPs.

PancakeSwap V3 will have two additional features in the future: a V3 VIP trading rewards program and a position management function.

The VIP program is a tiered structure that rewards traders for their trading volume with special advantages such as the possibility of receiving a 5% trading fee refund, which may encourage greater platform activity and increase PancakeSwap’s income.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Harold

Coincu News

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.