PancakeSwap V3 Launches On BNB Chain and Ethereum
Decentralized Exchange Forks Uniswap V3 Just Days After License Expiry
By: Tarang Khaitan •DeFi News
PancakeSwap, the leading decentralized exchange (DEX) on the BNB Chain, has launched its V3 iteration on BNB Chain and Ethereum, featuring improved capital efficiency and an overhauled fee structure.
“We’re thrilled to offer our users a more efficient and capital-friendly trading experience, with lower fees and increased returns for liquidity providers,” said Mochi, the ‘head chef’ of PancakeSwap.
PancakeSwap becomes the first major protocol to copy the codebase of leading DEX Uniswap V3, with the release coming just two days after the expiry of Uniswap V3’s Business Source License (BSL), which prohibited unauthorized use of its code.
The protocol’s CAKE token is up about 15% this year.
Notably, PancakeSwap’s previous iteration was also a fork of Uniswap V2, which caused a clash between the communities at the time.
Despite the rivalry, however, PancakeSwap has cemented its position as the dominant DEX in the BNB chain ecosystem, with nearly $2.5B in total value locked (TVL).
Liquidity Providers (LPs) on PancakeSwap V3 can deploy their liquidity in custom price ranges, thereby earning higher fees with improved capital efficiency.
The AMM’s fee structure has been completely overhauled, with V3 offering fee tiers of 0.01%, 0.05%, 0.25%, and 1%. In contrast, PancakeSwap V2 charged a 0.25% fee on all trades.
Trading fees will be distributed between LPs and PancakeSwap’s treasury, with a portion of the fees going towards burning CAKE tokens.
PancakeSwap V3 Fee Tiers
The PancakeSwap team said that it is currently working on two additional features that will improve the user experience.
A Position Manager tool will allow LPs to deposit liquidity with a single click and enable automated management strategies. In addition, A VIP trading rewards program is in the works, which will grant loyal users exclusive perks based on their trading activity.