By
Chimamanda U. Martha
April 25th, 2024
The PancakeSwap DEX Version 3 also looks to introduce a “VIP” trading rewards program and a position manager feature down the stretch.
PancakeSwap DEX has launched Version 3 on Ethereum and BNB Chain, offering improved performance and lower fees. According to reports, Version 3 introduces four different trading fee tiers of the cheapest on-chain trading fees among the decentralized exchange’s contemporaries. Notable counterparts, in this case, include Uniswap and SushiSwap.
PancakeSwap’s touted trading fee tiers are 0.01%, 0.05%, 0.25%, and 1%. These fee tiers compare favorably with the DEX’s previous Version 2 single level of 0.25%.
According to developers, the PancakeSwap DEX Version 3 also offers increased returns for liquidity providers. This implies that liquidity providers can efficiently allocate capital on specific price intervals with enhanced capital efficiency. The exchange’s developers can reap higher fee earnings from the same deposit amounts by allocating capital on smaller price ranges.
PancakeSwap DEX Version 3 to Balance between Low-Fee Traders with High Liquidity.
The latest version of PancakeSwap’s automated market maker platform is designed to create a balance between the lowest fee-paying traders and the highest accruable LP liquidity. By offering a token pair liquidity pool for each fee tier, PancakeSwap’s DEX Version 3 sees asset pairs moving toward the most rewarding tiers.
In the previous PancakeSwap version, liquidity from providers was spread out evenly along trading pair price curves. The decentralized exchange identified this pattern as inefficient because assets usually trade within specific ranges.
PancakeSwap’s Version 3 looks to introduce two new features still in development. These are a Version 3 “VIP” trading rewards program and a feature for position managers. As a tiered system, the VIP program will reward traders for trading volume by offering exclusive perks. These benefits include a 5% trading fee rebate that could potentially stoke more activity on PancakeSwap and increase its revenue potential.
Meanwhile, PancakeSwap’s position manager feature facilitates seamless trader liquidity deposit and position optimization. The tool automatically allows users to adjust their positions and fee rewards, eliminating the need for third-party integration manual calculations.
PancakeSwap Version 3 is compatible with all tools created for Uniswap’s Version 3. Furthermore, as of Monday, PancakeSwap, which boasts more than 1.5 million unique users, had over $2.5 billion in total value locked (TVL). Meanwhile, DefiLlama data reported that Uniswap had a TVL of $3.9 billion today.
Arbitrum 50M On-Chain Transfer Controversy
In other DeFi-related news, Arbitrum recently addressed its unauthorized ARB transfer controversy. The Ethereum Layer 2 protocol’s governance platform, the Arbitrum Foundation, recently offloaded 50 million ARB tokens on-chain without community approval. However, amid the backlash, Arbitrum explained that it sold ARB in the DAO’s interest. The Foundation said it loaned 40 million ARB from the total on-chain transfer to a financial markets player. Arbitrum added that it converted an additional 10 million ARB tokens for stablecoins to fund ongoing operating expenses. The Foundation also said it would not offload any more tokens ahead of the conclusion of its Arbitrum Improvement Proposal (AIP-1) ratification exercise. As it stands, 70% of the community is against the proposal.