Version 3 of the PancakeSwap DEX has been released on Ethereum and BNB Chain, providing enhanced functionality and reduced transaction fees. (1)
Reports indicate that Version 3 includes four distinct trading charge categories that boast the industry’s lowest on-chain trading costs compared to those of the decentralized exchange’s competitors. In this particular scenario, notable alternatives include Uniswap and SushiSwap.
The trading fee tiers that are advertised by PancakeSwap are 0.01%, 0.05%, 0.25%, and 1%. When compared to DEX’s former single level of 0.25%, these cost levels are far more attractive options.
The developers claim that the PancakeSwap DEX Version 3 provides improved rewards for liquidity providers as well.
This suggests that liquidity providers can deploy capital on certain price intervals in an efficient manner, resulting in greater capital efficiency.
Suppose the architects of the exchange allocate capital on more specific price ranges. In that case, they will be able to generate bigger fee revenues from the same quantity of deposits.
PancakeSwap DEX Version 3 Strives to Balance Low-Fee Traders and Good Liquidity.
The most recent iteration of PancakeSwap’s automated market maker technology is intended to strike a balance between traders who pay the lowest fees and those that accrue the most LP liquidity.
PancakeSwap’s DEX Version 3 encourages asset pairs to move toward fee tiers that give the most lucrative rewards by providing a liquidity pool for token pair trading at each fee level.
In earlier versions of PancakeSwap, the liquidity offered by providers was distributed in a uniform manner along the price curves of trading pairs.
This pattern was found inefficient by the decentralized exchange due to the fact that assets often trade within defined ranges.
Version 3 of PancakeSwap is expected to include two new features that are currently under development. Both a trading rewards program called “VIP” for version 3 and a function for position managers is included here.
The VIP program is structured as a tiered system that will award traders exclusive rewards based on the volume of their trading activity.
One of these incentives is a rebate on trading fees of 5%, which can stimulate more activity on PancakeSwap and boost the platform’s earning potential.
In the meantime, the position manager feature of PancakeSwap makes it possible for traders to optimize their positions and deposit liquidity without any hitches.
Users can make changes to their positions and the incentives they receive immediately through this tool, which eliminates the requirement for manual computations or integration with a third party.
All tools that were developed for Uniswap’s Version 3 are compatible with PancakeSwap Version 3, and vice versa. In addition, as of this past Monday, PancakeSwap, which boasts a total of more than 1.5 million unique users, has over $2.5 billion in value locked up (TVL).
In the meantime, statistics from DefiLlama indicated that Uniswap currently possessed a TVL of $3.9 billion.
The Debate About the Arbitrum 50M On-Chain Transfer
Arbitrum has recently addressed the controversy around their unapproved ARB transfer, which is more DeFi-related news. The Arbitrum Foundation, which serves as the governance platform for the Ethereum Layer 2 protocol, recently discharged fifty million ARB coins onto the chain without receiving approval from the community.
However, in the midst of the outcry, Arbitrum clarified that the sale of ARB was done in the interest of the DAO.
The Foundation revealed that it participated in the overall on-chain transfer by lending 40 million ARB to a participant in the financial markets. Arbitrum stated that in order to pay ongoing operating expenses, it had converted an extra 10 million ARB tokens into stablecoins.
In addition to this announcement, the Foundation stated that it would not sell any additional tokens before the ratification process for its Arbitrum Improvement Proposal (AIP-1). At this point, almost seventy percent of the community is opposed to the proposition.