Per the announcement by PancakeSwap, a decentralized exchange platform, V3 is now live on BNB Chain and Ethereum, with better improvements in comparison to V2. To start with, PancakeSwap V3 offers higher efficiency and flexibility in setting the fee structure for its users. Trading fees have been reduced by 25 times, while there has been a 4,000-fold increase in capital efficiency, allowing users to earn higher profits more conveniently.
Liquidity providers have a lot to celebrate with the launch of V3. The trading fee has been revised to include flexibility, giving them a choice to set the point within the range based on their preference. V2 had a 0.25% fee on all trades, irrespective of their categories and size. V3 fixes that with a broad range of four different fee structures. These are 0.01%, 0.05%, and then moving upward to 0.25$ and 1%.
The PancakeSwap treasury and liquidity providers will each receive an appropriate share of the trading fee that the mechanism generates. As a matter of fact, arrangements are in place to ensure that a certain portion goes towards burning CAKE tokens.
Distribution among liquidity providers, treasury, and CAKE burns is depicted in the table below:
|
Trading Fees Range |
Liquidity Provider Share | Treasury | CAKE Burn |
|
0.01% |
67% | 23% | 10% |
|
0.05% |
66% |
24% | 10% |
|
0.25% |
68% |
9% |
23% |
|
1.00% |
68% |
9% |
23% |
Advertisement
This can be practically explained by considering two traders, A and B. Trader A would earlier provide 1,000 USDT, but that would go to Trader B for 997.5 USDC at a 0.25% fee. The same can now be reflected at 999.9 USDC if the fee is 0.01%. The example is based on the assumption that the price is 1:1 and the trading slippage is negligible.
PancakeSwap continues to dominate the BNB Network as a decentralized exchange. It last registered a total value lock of $2.5 billion. V3 aims to further cement the position of DEX on the BNB Chain while gaining the top rank on the Ethereum chart.
The development comes days after Uniswap’s V3 BSL (Business Source Licence) expired
The future looks promising not only because V3 is live on BNB Chain and Ethereum with improved functionalities but also because it has two more features in the pipeline. Position Manager and VIP Trading Reward Points could soon be implemented by PancakeSwap. A definite timeline is unavailable, but the implementation can happen at the earliest.
Advertisement
The Position Manager Tool makes it seamless for liquidity providers to deposit liquidity with just a single click. They can further enable automated strategies to manage liquidity. The VIP Trading Rewards Program is going to be dedicated to users who have been loyal to the platform with regular trading activity. Based on what has been shared so far, it is safe to assume that loyal users will have access to exclusive perks on PancakeSwap.
