PancakeSwap Unveils Version Four Codebase: Introduces Flash Accounting and Custom Liquidity Pools
Summary:
PancakeSwap, a leading decentralized exchange, has unveiled its fourth-version codebase and white paper. The new version includes features like custom liquidity pools, flash accounting, and a 'singleton' model aiming to reduce user costs and improve liquidity pool functionalities. It is set to launch on Ethereum and BNB networks during Q3, 2024. The team has also established a $500,000 development fund to encourage independent developers to create custom add-ons, known as 'hooks.'
PancakeSwap, a leading decentralized exchange, unveiled its fourth-version codebase and associated white paper on March 15, as reported by the team. This latest release is set to enable custom liquidity pool functionalities and flash accounting, which aims to decrease user gas costs and eliminate impermanent loss for liquidity providers. Additionally, a development fund is being set up to finance the continued evolution of PancakeSwap's protocol.
PancakeSwap is recognized as the third largest decentralized crypto exchange based on the cumulative value of crypto assets stashed within its contracts. With a holding of over $2.3 billion in assets distributed over nine distinct networks, it's a prominent player, as indicated by data from DefiLlama.
The forthcoming version is slated for rollout on both Ethereum and BNB networks in Q3 2024. According to the team, v4 features 'hooks', or malleable add-ons that can be tailor-made by third-party developers to impart more capabilities to specific liquidity pools. This could result in pools offering dynamic fees, custom oracles, and more effective liquidity management models.
In addition, the new version promotes liquidity book pools. Unlike the conventional pools that adhere to the X*Y = K formula, these utilize the X + Y = K format. PancakeSwap asserts that this novel pool variant will enable liquidity providers to avoid impermanent loss and traders to evade price impact during trading within a bin.
The team also implemented measures to lower gas costs, including transitioning to a 'singleton' model where all pools are amalgamated into a single contract. This is anticipated to cut down the cost of 'multi-hop' trades which necessitate more than one swap to finalize. The v4 protocol also introduces 'flash accounting,' an initiative aimed at cutting costs further by streamlining the accounting process for batches of transactions.
According to the team, the new code will be released as open-source. Interested developers can apply to become officially recognized 'affiliates' by forking the code. Furthermore, PancakeSwap is launching a $500,000 developer program to incentivize the creation of hooks for v4 by independent developers.
As the ecosystem of cryptocurrency users expands, decentralized exchanges are vying to introduce novel features to capture market share. Uniswap recently announced the launch of a built-in exchange web extension wallet on Feb. 27. Additionally, in November 2023, it revealed a 'gauges' voting feature enabling PancakeSwap token holders to vote for polls eligible for extra rewards.
Published At
3/15/2024 4:00:00 PM
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