Revolutionizing DeFi: PancakeSwap Unveils v4 Featuring Custom Pools & Gas Efficiency

As per their team’s announcement, PancakeSwap, the decentralized exchange, just dropped its version four codebase and white paper today. This update includes some cool features: custom liquidity pools and flash accounting. The goal? Slash those gas costs for users and shield liquidity providers (LPs) from impermanent losses. Moreover, they’re setting up a development fund to keep improving PancakeSwap. Exciting stuff!

PancakeSwap v4 logo. Source: PancakeSwap

PancakeSwap ranks as the third-biggest decentralized crypto exchange, based on the total value of cryptocurrency locked in its contracts. Currently, it secures over $2.3 billion in assets distributed across nine different networks, as reported by blockchain analytics platform DefiLlama.

However, the announcement says the new version will appear on Ethereum and BNB networks in the third quarter of 2024.

The team said v4 has “hooks,” like customizable add-ons made by different developers. These help add more stuff to specific pools. For instance, pools can have dynamic fees, custom oracles, and active liquidity management modules.

It also helps liquidity book pools, as said. Unlike regular pools that go by X*Y = K, liquidity book pools go by X + Y = K. PancakeSwap said this new pool type lets liquidity givers not lose value temporarily and traders not get hit by price changes when trading in a bin.

Enhancing PancakeSwap: Gas Reductions & Developer Initiatives

The developers also tweaked things to cut down on gas costs. They merged all the pools into one contract, calling it the “singleton” model. They say this will make “multi-hop” trades cheaper since they won’t need multiple swaps. Plus, in the v4 protocol, they added “flash accounting.” It’s supposed to make the accounting process faster by tallying up net balances for several transactions simultaneously, lowering gas costs even more.

The team said they’re releasing new code, and it’s free for anyone to use. If you’re a developer and like the code, you can sign up to be an “affiliate” and be recognized by the team. Plus, PancakeSwap is starting a program with $500,000 to help independent developers make add-ons for v4.

As more people use crypto, decentralized exchanges rush to add new stuff to get more users. On Feb. 27, Uniswap said they were making a web wallet with their exchange inside. Last November, they said they were adding a voting thing called “gauges,” so PancakeSwap’s (CAKE) owners could pick which polls get more rewards.

Related Reading | Elon Musk Teases Tesla Taking Dogecoin For Cars: DOGE To Skyrocket?

The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.

Comments (No)

Leave a Reply