Last week, we launched PancakeSwap v4, and we understand you may have questions about our latest upgrade. We've compiled this comprehensive FAQ to address all your inquiries. Let's dive in:
Q1 How will PancakeSwap v4 benefit traders and liquidity providers?
Ans: PancakeSwap v4 brings a lot of advantages for both traders and liquidity providers:
1. Streamlined Operations and Gas Savings: Through features like Singleton and Flash Accounting, PancakeSwap v4 drastically reduces gas fees. Singleton consolidates all pools into a single contract, slashing deployment costs by 99%. Flash Accounting optimizes accounting processes by computing net balances for transactions, minimizing gas consumption.
2. Direct Benefits from Advanced Features: The integration of hooks allows for implementing dynamic fees, custom order types, and active liquidity management modules. Liquidity providers can enjoy mitigated impermanent loss (IL), MEV protection, and access to various fee tiers, ensuring more profitable and secure trading experiences.
3. Flexibility in AMM Designs: PancakeSwap v4 supports multiple pool types, including CLAMM and the LBAMM, allowing traders and LP to pick different pool types. This inclusive approach also allows supporting any future assets requiring new pricing curves. Check out this blog to learn more
Q2 How will PancakeSwap v4 benefit developers and defi protocols?
Ans: PancakeSwap v4 opens up a world of possibilities for developers and DeFi protocols.
1. Endless Customization Possibilities: With PancakeSwap v4, developers can build Hooks to introduce custom functionalities; from dynamic fees to on-chain limit orders and custom oracles. PancakeSwap 🧟♂️ v4 supports deploying new pool types (CLAMM, LBAMM, and any other pool types in the future), enhancing capital efficiency and trading flexibility.
2. Access to Robust Liquidity and User Base: With over 1.8 million active users and $2.24 billion in liquidity, developers and DeFi protocols have an unparalleled opportunity to tap into a vast and active community, fostering product development and adoption.
3. Revenue Generation Opportunities: Developers can establish a consistent revenue stream through hook fees, allowing them to set fees for utilizing their hooks. By monetizing their innovations with fees, developers can contribute to the growth and development of the PancakeSwap ecosystem. Check out this blog to learn more
Q3 When will PancakeSwap v4 be officially launched?
Ans: The PancakeSwap v4 product for users is tentatively scheduled for launch in Q3, with further announcements to follow closer to launch.
Q4 Will PancakeSwap v4 be available on all the chains where PancakeSwap v3 is deployed?
Ans: Initially, 🧟♂️ PancakeSwap v4 will launch on Ethereum and BNB Chain, with plans to expand to other chains.
Q5 What improvements does PancakeSwap v4 bring compared to v3?
Ans: PancakeSwap v4 introduces the capability to enhance liquidity pool functionalities with custom features without re-implementing the core protocol. It also supports the implementation of any pricing curve on the go and offers substantial gas savings for users.
Q6 Will there be any changes to the user interface or user experience in PancakeSwap v4?
Ans: Once launched in Q3, users can swap on v4 through PancakeSwap’s swapping page, just like the usual friendly experience. For traders and liquidity providers, there will be more options to add liquidity as we support multiple pools, such as CLAMM and LBAMM, 🧟♂️ with detailed guidance provided upon launch.
Q7 Can 🧟♂️ developers start building hooks for PancakeSwap v4 immediately after the whitepaper release?
Ans: Developers can build hooks immediately after the v4 whitepaper release. Join our developer community to share ideas and seek assistance. Learn more
Q8 How can the community get involved in testing or providing feedback for PancakeSwap v4?🧟♂️
Ans: If you're a community member, feel free to share your feedback through our socials on Telegram, Discord, and Twitter. If you're a developer, join our developer Discord community and share your thoughts.
Q9 Where can users find more information about PancakeSwap v4 and stay updated on its development progress?
Ans: Visit our official website (https://pancakeswap.finance/v4?utm_source=v4announcementblog&utm_medium=blog&utm_campaign=v4announcementblog&utm_id=v4announcementblog)., read our white paper., and follow us on social media for the latest updates and developments. If you're a developer, join our developer Discord community.
Q10 What is the licensing mechanism for PancakeSwap v4?
Ans: PancakeSwap v4 is committed to open-source principles. Our code will be released under an open-source license, empowering developers to innovate freely. However, As a part of our Affiliate initiative, DeFi protocols forking PancakeSwap will be warmly welcomed and officially recognized by the Kitchen.
Q11 How does PancakeSwap v4 reduce gas fees?
Ans: PancakeSwap v4 leverages the Singleton and Flash accounting mechanisms to reduce gas fees significantly. By consolidating all pools into a single contract (singleton), multi-pool transactions are simplified, making them more cost-effective. Flash Accounting replaces individual transfers with net balances, computed collectively at the end of each transaction, resulting in substantial gas savings. ERC-6909 further reduces gas for frequent users by letting users keep their funds within the protocol and use them when required, eliminating transfers to/from their wallets.
Q12 Can I still use PancakeSwap during the v4 transition?
Ans: Yes, PancakeSwap will remain accessible during the v4 transition, with no changes to user experience.
Q13 What are Hooks in PancakeSwap v4, and how do they enable innovation on PancakeSwap v4?
Ans: Hooks are customizable add-ons that enhance liquidity pool functionality, allowing developers to introduce custom features and fee management options. Deployed externally, Hooks can execute predefined logic during key pool actions, offering endless possibilities, including dynamic fees, order types, custom oracles, and active liquidity management strategies. Check out this blog to learn more.
Q14 What opportunities does PancakeSwap v4 present for developers?
Ans: Developers can build innovative solutions, generate revenue through hook fees, and tap into PancakeSwap's extensive user base and deep liquidity. Read our dedicated blog post on why developers should build on PancakeSwap.
Q15 Will PancakeSwap v4 support cross-chain functionality?
Ans: Initially launching on Ethereum and BNB Chain, PancakeSwap v4 will expand to multiple chains over time. We also plan to support cross-chain Trading and Liquidity Provisioning later.
Q16 How does PancakeSwap v4 contribute to the broader DeFi ecosystem?
Ans: PancakeSwap v4 aims to address the shortcomings of current AMMs, enhance the DEX experience, and evolve into the highest-functionality DeFi platform supported by our open-source approach. Read our Head Chef, Chef Mochi's vision for v4 to learn more
Q17 Where can we find the hook template repository?
Ans: Hooks template can be found at https://github.com/pancakeswap/pancake-v4-hooks-template and example hooks at https://github.com/pancakeswap/pancake-v4-hooks
Q18 Can you explain the life cycles of hooks and their examples?
Ans: Hooks can be implemented before / after 5 key actions namely initialize, swap, addLiquidity, removeLiquidity, donate. For instance, when a user initiates a swap, the PoolManager contract checks if a beforeSwap hook callback exists. If it does, the logic under the beforeSwap method in the hook contract is executed; otherwise, the swap proceeds as usual. After the swap is completed, the same process occurs for the afterSwap callback.
Q19 Do we need to perform address mining to ensure hooks are deployed at a specific address?
Ans: Hooks can be deployed on any address like other contracts. Callback permissions are set at PoolKey. For more info, please see the faq for hooks here https://developer.pancakeswap.finance/contracts/v4/overview/custom-layer-hook#faqs
Q20 How can we verify a hook contract on etherscan?
Ans: If you are using foundry, you can refer to the foundry guide here https://book.getfoundry.sh/reference/forge/forge-verify-contract
Or if you are using hardhat, refer to the hard guide here https://hardhat.org/hardhat-runner/docs/guides/verifying
Q21 Should we use foundry or hardhat for hook development? Ans: The template https://github.com/pancakeswap/pancake-v4-hooks-template is based on foundry; thus, we advise using foundry. Besides that, the foundry has been growing in popularity!
Q22 What are pool keys? Ans: PoolKey is a struct that describes each pool. See more here https://developer.pancakeswap.finance/contracts/v4/overview/amm-layer-poolmanager#poolkey--poolid
PancakeSwap v4 represents a significant milestone in the DeFi space, offering unparalleled benefits for traders, developers, liquidity providers, and the broader community. We're excited to embark on this journey with you and look forward to shaping the future of DeFi together. We hope this FAQ has answered your questions about PancakeSwap v4. If you have any further questions, feel free to reach out to us via (Twitter, Discord, and Telegram) or check our official documentation.
PancakeSwap v4 Directory
Introducing PancakeSwap v4: For Developers, Traders & Every User
Mochi's vision for PancakeSwap v4
Why should Developers build on PancakeSwap v4 and How to build Hooks
Introducing PancakeSwap’s $500K Developer Program and CAKE Emissions Grant Program
What’s in it for Developers, DeFi Protocols, Traders, and Liquidity Providers