PancakeSwap is a decentralized exchange built on the BNB Smart Chain, Ethereum, and Aptos network. With its numerous features, such as Liquidity Pools (LPs), yield farming, Syrup Pools, Initial Farm Offerings (IFOs), and NFT profiles - PancakeSwap has become a popular platform among cryptocurrency traders and investors.

To know more about our platform, please read [this article](https://blog.pancakeswap.finance/articles/what-is-pancake-swap).


Here's a step-by-step guide on how to get started with PancakeSwap:

**1. Set up a crypto wallet**

To use PancakeSwap, you need a wallet that supports the BNB Smart Chain, Ethereum, or Aptos. Fortunately, almost any wallet will do! You can use wallets like Trust Wallet, MetaMask, or Binance Wallet.
![Wallet Set Up](https://sgp1.digitaloceanspaces.com/strapi.space/a9468facafb8bab5805c539e3b4c976c.png)


If you prefer BNB Smart Chain network, you will need to set up a wallet and have BEP-20 tokens + BNB ready. See the  **[guide](https://docs.pancakeswap.finance/get-started)** here.

If you prefer Ethereum network, you'll need to set up a wallet and have ERC-20 tokens + ETH ready. See the **[guide](https://blog.pancakeswap.finance/articles/step-by-step-guide-how-to-create-an-ethereum-wallet)** here.

If you prefer the Aptos network, you'll need to set up a wallet that supports the Aptos network and prepare APT tokens, here is our **[guide](https://docs.pancakeswap.finance/get-started-aptos/wallet-guide)** .


**2. Connect your wallet to PancakeSwap**

First, go to the PancakeSwap website and click on "Connect" in the upper right-hand corner. Select your wallet and connect it to PancakeSwap. For most browser extension wallets, simply select their icon, and follow the instructions in the pop-up window. Here are examples of how to connect your **[Trust Wallet](https://blog.pancakeswap.finance/articles/how-to-trade-on-pancake-swap-using-trust-wallet)** and **[MetaMask](https://blog.pancakeswap.finance/articles/connect-meta-mask-to-pancake-swap-a-step-by-step-guide)**.


![Binance Wallet Extension](https://sgp1.digitaloceanspaces.com/strapi.space/2271f8b4f6e833e9dd25bca07c12df0f.png)



**3. Start trading!**

With your wallet connected, you're ready to embark your trading journey on PancakeSwap. To begin, select the "Trade" tab and choose a trading pair. You can swap between cryptocurrencies, provide liquidity, or trade on various markets. We will teach everyone in the next episode!


![trade.png](https://sgp1.digitaloceanspaces.com/strapi.space/ef72d7563b9d4dc57d0521a615078bb6.png)





A comprehensive step-by-step guide on how to get started with PancakeSwap, starting from setting up a wallet to connecting it to the platform.

EP1. Setting up PancakeSwap

***Disclaimer and Risk Warning:** This content is for general information and educational purposes only, without representation or warranty. It should not be construed as financial, legal, or other professional advice, nor intended to recommend purchasing any specific product or service. You should seek advice from appropriate professional advisors.*

DeFi is constantly evolving, and now, it’s taking a leap into the future by combining it with another cutting-edge technology: Artificial Intelligence (AI). This fusion is called DeFAI, where decentralized finance (DeFi) meets AI to create smarter, more efficient financial systems.

But what exactly is DeFAI, and why should you care? Let’s break it down!

## **What is DeFAI?**

DeFAI is short for **Decentralized Finance + Artificial Intelligence**. It’s an emerging field that combines the power of AI with DeFi to automate processes, optimize decision-making, and create new opportunities in decentralized finance. By using AI to enhance DeFi’s functionality, we’re talking about more efficient trades, smarter investments, and more secure systems—all within the decentralized framework we know and love.

## **How Does DeFAI Work?**

DeFAI leverages AI to solve some common challenges in the DeFi world. Here's how AI is already improving DeFi across various areas:

- **Task Automation:** AI can simplify complex operations by automating trading, portfolio rebalancing, and yield farming. For instance, trading bots powered by AI algorithms can execute trades based on real-time market conditions and patterns. At the same time, portfolio managers can automatically adjust asset allocations to maintain a desired risk-return profile.
- **Improved Accessibility:** AI-powered DeFi platforms can offer personalized insights and guidance by creating intuitive tools and interfaces. For example, AI-driven dashboards might recommend tailored investment strategies based on a user’s historical activity, preferences, and financial goals, helping new users easily navigate the DeFi landscape.
- **Data Optimization:** AI excels in processing large, complex datasets, transforming raw blockchain data into actionable insights. Applications include analyzing liquidity pool performance, identifying optimal yield farming opportunities, or predicting market trends based on on-chain activity.
- **Enhanced Security:** AI systems can monitor smart contracts and network activity to identify anomalies or potential vulnerabilities. For instance, predictive algorithms might detect suspicious patterns in transaction data, flagging possible exploits before they occur. Additionally, AI tools can assist in auditing smart contracts to ensure their robustness and integrity.

## **Real-World Examples of DeFAI in Action**

Here are some specific ways AI is already powering up DeFi:

**1. Automation and Efficiency**

- **Trading Bots:** Algorithms may analyze on-chain and market data to execute trades, potentially reducing human error.
- **Yield Optimization:** AI tools could recommend staking or farming opportunities tailored to user preferences.

**2. Enhanced User Experience**:

- **Providing Personalized Insights:** AI tools might deliver tailored recommendations, helping users navigate complex options.
- **Simplifying Interfaces:** By reducing technical barriers, AI-powered interfaces could make DeFi accessible to less-experienced users.

**3. On-Chain Analysis**

- **Market Trends and Anomalies:** AI systems may detect patterns or anomalies humans might overlook, offering data-driven decision-making tools.
- **Portfolio Optimization:** AI could suggest ways to rebalance assets or manage risks by analyzing user holdings.

**4. Security Enhancements**

- **Monitoring Smart Contracts:** AI systems could scan for vulnerabilities or irregular activities in real-time.
- **Detecting Fraudulent Activities:** Advanced algorithms might flag suspicious transactions, reducing the risk of exploits.

### **Challenges and Limitations of DeFAI**

While DeFAI has the potential to address some inefficiencies in DeFi, several obstacles could hinder its seamless adoption:

**1. Data Quality and Availability**

AI relies on high-quality datasets to deliver accurate predictions and insights. However, blockchain networks often lack standardized data structures, leading to fragmented or incomplete datasets. For example, decentralized oracles may provide inconsistent information, causing errors in AI models used for price predictions or liquidity management. Real-time integration of reliable data feeds is essential to enable effective AI applications.

**2. Scalability Concerns**

AI-driven processes require computational resources, and when combined with blockchain's existing limitations—such as network congestion, high gas fees, and slow transaction speeds—this can create bottlenecks. For instance, executing machine learning models on-chain could lead to delays in transaction processing. To address this, Layer-2 solutions like rollups or sidechains and technologies like sharding must be implemented to ensure seamless scalability.

**3. Privacy Implications**

AI's need for extensive data raises privacy concerns, especially in a transparent blockchain ecosystem. For example, analyzing user transactions to recommend strategies could inadvertently expose sensitive financial information. Privacy-preserving techniques, such as homomorphic encryption or zero-knowledge proofs, could help balance transparency and data confidentiality.

**4. Community Perception**

The introduction of AI into DeFi may challenge the ethos of decentralization, as users might perceive AI-driven systems as opaque or centralized. Ensuring that AI models are auditable and decentralized can alleviate these concerns, fostering trust within the community.

### **A Balanced View of DeFAI**

DeFAI offers significant potential for improving DeFi, from increasing efficiency to boosting security. However, integrating AI into DeFi also brings challenges, including data quality, privacy concerns, and scalability issues. To make DeFAI work, we must balance automation with decentralization, transparency, and trust.

As DeFAI develops, we need to consider key questions:

- Can AI improve DeFi without compromising its core values of decentralization and transparency?
- How can we ensure AI models are explainable and trustworthy to users?
- What safeguards are needed to prevent over-reliance on automated systems?

These are essential questions for DeFi's future. DeFAI represents an exciting opportunity to explore how AI and decentralized finance can work together to create a more innovative and more efficient system.

**The Chefs**

DeFAI, where decentralized finance (DeFi) meets AI to create smarter, more efficient financial systems.

What’s DeFAI: A New Intersection of Decentralized Finance and Artificial Intelligence

***Disclaimer and Risk Warning:** This content is for general information and educational purposes only, without representation or warranty. It should not be construed as financial, legal, or other professional advice, nor intended to recommend purchasing any specific product or service. You should seek advice from appropriate professional advisors.*

## **What Are Gas Fees?**

Gas fees are the costs associated with performing transactions or executing smart contracts on a blockchain. They are a fundamental part of blockchain operations, ensuring the network functions securely and efficiently. These fees compensate validators or miners for their computational work and maintain network integrity. Gas fees serve three critical purposes:

1. **Transaction Prioritization:** Higher gas fees incentivize validators to prioritize certain transactions, especially during periods of network congestion.
2. **Network Security:** They deter spam and malicious activities by making large-scale abuse financially unfeasible.
3. **Resource Allocation:** Gas fees ensure that computational resources are distributed equitably, enabling the blockchain to process transactions efficiently.

## **How Are Gas Fees Determined?**

The cost of gas fees is influenced by several factors that dynamically interact to shape transaction costs:

1. **Gas Price:** This is the cost per unit of gas, which fluctuates based on network activity and demand. Users can increase the gas price to prioritize their transactions during congestion.
2. **Gas Limit:** This represents the maximum amount of computational effort required to execute a transaction. Simple transactions, like transferring tokens, require lower gas limits, while complex actions, such as interacting with smart contracts, demand higher limits.
3. **Priority Fees:** Users can add a priority fee to incentivize validators to process their transactions faster, particularly useful during high-traffic periods.

## **Challenges of Gas Fees for Blockchain Users**

Gas fees can be a significant hurdle, especially during periods of high network congestion, such as during token launches or major protocol updates. When demand for block space increases, gas prices can skyrocket, making it difficult for users to predict or manage costs effectively.

Other factors include:

- **Gas Price Volatility:** Rapid gas price changes create uncertainty, making it hard to estimate transaction costs in advance.
- **Scalability Issues:** Some blockchains have limited transaction throughput, leading to congestion and higher fees during peak usage times.
- **Complex Transactions:** Activities that require a lot of computational power, like deploying smart contracts or managing liquidity pools, often result in higher gas costs.

For users with smaller portfolios or frequently interacting with the blockchain, high gas fees can reduce profits or make certain actions impractical, creating barriers to widespread blockchain adoption.


### **Introducing PancakeSwapX Gasless Swaps**

[**PancakeSwapX**](https://blog.pancakeswap.finance/articles/introducing-pancake-swap-x-zero-fee-and-gasless-swaps-on-ethereum-and-arbitrum) is designed to minimize the burden of gas fees.

On networks like Ethereum and Arbitrum, PancakeSwapX allows users to perform swaps without needing native tokens to pay for gas. Instead, external liquidity providers cover the gas costs, incorporating them into the swap price. This makes transactions smoother and removes the need for users to manage fluctuating gas fees. Additionally, failed or expired transactions are handled off-chain, meaning users aren’t charged for unsuccessful trades. 

[**Explore PancakeSwapX now**](https://blog.pancakeswap.finance/articles/getting-started-with-pancakeswapx-a-beginner-s-guide).



Gas fees remain one of the biggest obstacles to broader blockchain adoption. However, with advancements like PancakeSwapX, users can save on costs and navigate the blockchain more easily. By understanding how gas fees work and utilizing tools like PancakeSwap, users can take advantage of more affordable and efficient decentralized finance options.

**Start saving on your trades today.**

**The Chefs**

Gas fees are the costs associated with performing transactions or executing smart contracts on a blockchain.

Understanding Gas Fees: How PancakeSwap Helps Users Save Costs

### **What Are Layer 2 Solutions?**

**Layer 2 (L2)** solutions are built on top of Layer 1 (L1) blockchains. They process transactions off-chain or in parallel, then anchor results to the main chain for security. This improves speed, reduces fees, and enhances scalability while maintaining the security of the L1 blockchain.

## **Common Types of Layer 2 Solutions**

**1\. Rollups**
- Optimistic Rollups: Assume transactions are valid unless proven fraudulent.
- ZK Rollups: Use cryptographic proofs to validate transactions before submitting them to L1.
        
Examples: Arbitrum, Optimism, zkSync, Polygon zkEVM
        
**2\. State Channels**
- Enable off-chain transactions with only the final state recorded on L1.
        
Example: Bitcoin’s Lightning Network
        
**3\. Sidechains**
- Independent chains that connect to L1 for interoperability and periodic anchoring.
        
Example: Polygon PoS
        

## **Why Do We Need Layer 2 Solutions?**

Layer 1 blockchains struggle to handle high transaction volumes efficiently, which may lead to longer transaction times and higher fees. Layer 2 (L2) solutions address these challenges by introducing an additional layer that processes transactions off-chain or in parallel while periodically anchoring their results to the main chain.

### **1. Accelerating Transaction Speeds**

L2 solutions significantly speed up transactions by offloading processing from the L1 chain. Instead of waiting for confirmation from the main chain, users can benefit from near-instant transaction finality on L2 networks. This improvement is crucial for use cases requiring high-frequency interactions, such as trading, gaming, or real-time financial applications.

### **2. Reducing Transaction Costs**

High transaction fees on L1 blockchains, particularly during network congestion, can make small or frequent transactions economically unfeasible. L2 solutions reduce these costs by batching multiple transactions together and processing them off-chain before submitting a single aggregated proof to the main chain. This approach dramatically lowers the computational and storage demands on L1, translating into lower fees for end users.

### **3. Enhancing Scalability**

Scalability is essential for supporting the growing number of dApps and users in the blockchain ecosystem. By processing a large volume of transactions off-chain, L2 solutions relieve the strain on L1 blockchains, enabling them to handle more users and applications without compromising performance. This scalability ensures that blockchain technology can support mass adoption in industries like finance, supply chain, and gaming.

### **4. Preserving Security and Decentralization**

A key advantage of L2 solutions is that they inherit the security and decentralization properties of the underlying L1 blockchain. Mechanisms like fraud proofs (Optimistic Rollups) or cryptographic validity proofs (ZK Rollups) ensure that transactions processed off-chain remain secure and trustworthy. By anchoring transaction data back to the L1 chain, L2 solutions retain the core principles of blockchain technology, providing users with confidence in their reliability and fairness.

### **Sustainability of Layer 2 Solutions**

For Layer 2 networks to remain effective, they must balance scalability, security, and affordability.

1. **Managing Growth**: L2 reduces the load on L1 by handling transactions off-chain, allowing L1 to maintain security while L2 scales.
2. **Cost Efficiency**: Optimizes transaction bundling and gas costs to keep fees low and operational costs sustainable.
3. **Security and Decentralization**: L2 solutions inherit L1 security but must gradually decentralize to avoid centralization risks.

### **How PancakeSwap Uses Layer 2**

PancakeSwap is deployed on several Layer 2 networks, including **Arbitrum One**, **Base, Linea, Polygon zkEVM**, and **zkSync Era**. This allows users to:

- **Access Fast and Low-Cost Transactions**: Take advantage of faster processing and lower fees than Layer 1.
- **Engage with Core Features**: Use PancakeSwap’s decentralized exchange (DEX), liquidity pools, and yield farming features with improved performance and reduced costs.

PancakeSwap’s integration with Layer 2 solutions makes its features more accessible, enhancing the user experience while maintaining security and decentralization.

Layer 2 solutions help blockchain networks scale by processing transactions off-chain and anchoring them to Layer 1. PancakeSwap, deployed on Layer 2 solutions like Arbitrum One and Base, benefits from faster transactions, lower fees, and greater scalability, providing users with an efficient and cost-effective experience.

The Chefs

Layer 2 solutions help blockchain networks scale by processing transactions off-chain and anchoring them to Layer 1.

What Are Layer 2 Solutions?

***Disclaimer and Risk Warning:** This content is for general information and educational purposes only, without representation or warranty. It should not be construed as financial, legal, or other professional advice, nor intended to recommend purchasing any specific product or service. You should seek advice from appropriate professional advisors.*

PancakeSwap offers two key tools—[**Zap**](https://docs.pancakeswap.finance/products/pancakeswap-exchange/zap) and [**Position Manager**](https://pancakeswap.finance/position-managers)—that simplify liquidity provision for advanced yield farmers. These features streamline the process of adding liquidity, managing positions, and optimizing yield farming strategies.

### **Zap Feature: Simplified Liquidity Provision**

PancakeSwap’s [**Zap feature**](https://blog.pancakeswap.finance/articles/understanding-single-sided-liquidity-and-how-pancakeswap-zap-feature-simplifies-liquidity-provision) allows users to add liquidity with just one token rather than requiring a 50/50 split of two tokens. When a user deposits a single token, Zap automatically converts part of it into its pair, ensuring a balanced liquidity pool token. This saves time and reduces the transaction fees normally associated with manually swapping tokens.

![image3.png](https://sgp1.digitaloceanspaces.com/strapi.space/79cf7797a03df64130ac7903850619fc.png)

For yield farmers, this feature simplifies entering liquidity pools and minimizes the effort required to maintain token ratios.

### **Position Manager: Easier Liquidity Management**


PancakeSwap’s [**Position Manager**](https://blog.pancakeswap.finance/articles/pancakeswap-rolls-out-the-position-manager-feature-on-v3)  tool helps users efficiently manage their liquidity positions. Key functions include:


![image1.png](https://sgp1.digitaloceanspaces.com/strapi.space/bbfc11e23f2529017d6398efa332e881.png)
- **Real-time tracking**: Monitor your LP token performance and rewards in one place.
- **Rebalancing**: Automatically adjusts token ratios in response to price changes, ensuring your position stays balanced.
- **Auto-harvesting**: Set up automatic reinvestment of rewards to further optimize your liquidity.

With the Position Manager, yield farmers can avoid the constant need to adjust their positions manually, allowing them to focus on broader strategy rather than micromanaging individual pools.

### **How the Two Features Work Together**

Users can achieve smoother, more efficient yield farming using the Zap feature and Position Manager. Here's how they complement each other:

- **Easy Pool Entry**: With Zap, users can enter liquidity pools with a single token, reducing complexity for new farmers.
- **Optimized Position Management**: The Position Manager balances token ratios and reinvests rewards automatically.


### **Risks and Considerations**

While these tools improve efficiency, yield farming still comes with risks:

- **Impermanent Loss**: Exposure to token price fluctuations can lead to impermanent loss in liquidity pools.
- **Smart Contract Risks**: As with any DeFi platform, vulnerabilities in smart contracts could pose risks.
- **Market Volatility**: Rapid market changes can affect the value of your staked tokens and rewards.

Understanding these risks will help you make informed decisions when using PancakeSwap's tools for liquidity provision.

The **Zap** feature and **Position** **Manager** simplify liquidity provision for advanced yield farmers by allowing them to enter, manage, and optimize liquidity positions. Enjoy Yield Farming!

**The Chefs**

PancakeSwap offers two key tools—Zap and Position Manager—that simplify liquidity provision for advanced yield farmers. 

What Advanced Yield Farmers Should Know: How Zap and Position Manager Streamline Liquidity Provision

***Disclaimer and Risk Warning:** This content is for general information and educational purposes only, without representation or warranty. It should not be construed as financial, legal, or other professional advice, nor intended to recommend purchasing any specific product or service. You should seek advice from appropriate professional advisors.*

## **What Are Liquidity Pools?**

Liquidity pools are collections of tokens locked into smart contracts. They allow PancakeSwap to facilitate token swaps without relying on traditional order books. Each pool pairs two tokens—enabling users to trade between them efficiently.

Traders interact directly with these pools rather than other users. This design ensures constant availability and a seamless trading experience, eliminating intermediaries.

## **How Liquidity Providers Contribute to PancakeSwap: Pools, Fees, and Rewards**

Liquidity providers deposit two tokens equal in value into a pool, receiving LP tokens in return. These LP tokens represent their share of the pool and entitle them to some rewards generated through trading activity and other incentives.

## **1. Trading Fees**

The trading fees depend on the type of liquidity pool:

- [**v3 Liquidity Pools:**](https://blog.pancakeswap.finance/articles/introducing-pancake-swap-v3-a-more-efficient-and-user-friendly-dex-on-bnb-chain-and-ethereum)
    - Fee tiers: 0.01%, 0.05%, 0.25%, or 1%.
    - Providers earn 66-68% of trading fees, with the remainder allocated for CAKE burn, treasury, and stakers.
- [**v2 Liquidity Pools:**](https://docs.pancakeswap.finance/products/pancakeswap-exchange/pancakeswap-pools)
    - A flat 0.25% fee per transaction.
    - 0.17% goes to LPs, while the rest supports CAKE buybacks, burns, and treasury operations.
- [**StableSwap Liquidity Pools:**](https://docs.pancakeswap.finance/products/pancakeswap-exchange/stableswap)
    - Fees range from 0.01% to 0.04%, depending on the pool.
    - 50% of fees reward LPs, with the remainder split between treasury funding and CAKE burns.

## **2. Yield Farming Rewards**

Farms require you to stake two tokens to provide liquidity and receive LP Tokens, which you then stake in the Farm to earn rewards. This lets you earn CAKE while still keeping a position in your other tokens.

## **3. Token Incentives**

Some pools offer extra rewards in the form of tokens from PancakeSwap partners, providing liquidity providers with further rewards. For example, you can [**receive both APT and CAKE**](https://blog.pancakeswap.finance/articles/pancake-swap-flourishes-on-aptos-unveiling-a-year-of-achievements-with-special-yield-farming-rewards) with Yield Farming on Aptos PancakeSwap.

### **Risks to Consider**

While liquidity provision can be rewarding, it comes with certain risks:

- [**Impermanent Loss:**](https://blog.pancakeswap.finance/articles/understanding-impermanent-loss-in-de-fi-and-how-to-avoid-it-a-guide-from-pancake-swap) Price fluctuations between the paired tokens may lead to lower returns than simply holding the tokens.
- **Smart Contract Risk:** Like all platforms, PancakeSwap depends on smart contracts, which could be vulnerable to bugs or exploits.
- **Market Risk:** The underlying tokens in a pool can lose value due to market downturns.

### **How to Get Started as a Liquidity Provider on PancakeSwap**

If you're ready to join, here’s a step-by-step guide for adding and removing liquidity on PancakeSwap V3. In V3, you will find a more flexible and customizable experience with features like Non-Fungible Liquidity Positions, Concentrated Liquidity, and Multiple Fee Tiers: [https://blog.pancakeswap.finance/articles/how-to-add-remove-liquidity-in-pancake-swap-v3-a-comprehensive-guide](https://blog.pancakeswap.finance/articles/how-to-add-remove-liquidity-in-pancake-swap-v3-a-comprehensive-guide)

### **Monitoring and Managing Your Positions**

Use PancakeSwap to track rewards and pool performance. You can withdraw your liquidity or harvest rewards at any time. Regularly review the pool’s performance and risks to make informed adjustments to your strategy.

Enjoy the LP rewards!

**The Chefs**

Liquidity pools are collections of tokens locked into smart contracts. They allow PancakeSwap to facilitate token swaps without relying on traditional order books. 

Understanding PancakeSwap's Liquidity Pools: How They Work and How to Get Started 

***Disclaimer and Risk Warning:** This content is for general information and educational purposes only, without representation or warranty. It should not be construed as financial, legal, or other professional advice, nor intended to recommend purchasing any specific product or service. You should seek advice from appropriate professional advisors.*

The DeFi market has seen rapid growth following its recovery, with total value locked (TVL) exceeding $20 billion* across decentralized exchanges and protocols, according to DefiLlama. This increase highlights DeFi's growing impact on the financial sector. As we approach 2025, several emerging trends are expected to further transform the DeFi landscape.

## **1. Self-Launchpads: Empowering Individual Creators**

Traditional token launchpads have been instrumental in helping projects raise funds and build communities. However, **a shift toward self-launchpads is empowering individual creators to launch tokens independently, reducing reliance on intermediaries and associated costs**. Platforms like **[PancakeSwap Springboard](https://blog.pancakeswap.finance/articles/introducing-pancake-swap-spring-board-create-and-launch-your-project-s-token-on-bnb-chain-pancake-swap-all-in-one-place-1)** exemplify this trend, offering tools for autonomous token launches. It's important to note that self-launchpads carry risks, including smart contract vulnerabilities, necessitating thorough due diligence.

## **2. AI and DeFi: The Perfect Synergy**

The integration of artificial intelligence (AI) into DeFi is enhancing decision-making and user experiences. AI-driven tools provide **personalized trading strategies, identify arbitrage opportunities, and improve risk management**. Beyond trading, AI optimizes operations like liquidity provisioning and yield farming, making DeFi more accessible to newcomers by reducing complexity.

## **3. Liquid Staking and Re-Staking Derivatives: Unlocking Staked Capital**

Proof-of-stake (PoS) blockchains have popularized staking as a means to earn rewards. However, traditional staking locks up capital, limiting its utility. Liquid staking addresses this by issuing derivative tokens representing staked assets, which can be traded, used as collateral, or reinvested. Platforms like EigenLayer are exploring re-staking derivatives, allowing staked assets to secure multiple networks simultaneously, enhancing capital efficiency.

## **4. Modular Blockchains: Scaling DeFi’s Infrastructure**

As DeFi scales, the limitations of monolithic blockchains become apparent. Modular blockchains, which separate data availability, execution, and consensus, offer improved scalability and customization for specific applications. Modular blockchains are different from the traditional model. They use a multi-layered structure that breaks tasks into specialized functions. This setup helps DeFi projects lower fees and speed up transactions while staying compatible with larger systems. There are different methods of implementing modular blockchains, each with unique characteristics. Notable examples include rollups, validium, and sovereign rollups. Rollups function as an execution layer, processing transactions and publishing data to a layer-1 network (L1). Validium is a variation of rollups that processes transactions off-chain before submitting the data to the L1. It also relies on a network of Proof of Stake validators. A sovereign rollup design utilizes off-chain computations to get to consensus. These off-chain computations could happen on the user wallet in the background and right before sending a transaction. 

## **5. Cross-Chain Swaps**

Users are increasingly seeking seamless trading experiences across different blockchain networks, which highlights the importance of bridges and protocols that facilitate interoperability. Platforms that effectively aggregate liquidity from various blockchains are strategically positioned to lead this development, allowing users to access a wide range of ecosystems without the added complexity of managing multiple wallets or assets.

DeFi sector is on the brink of a major transformation. New products such as self-launchpads, AI integration, and liquid staking derivatives are reshaping the financial landscape. To succeed in this rapidly evolving environment, participants within the DeFi space must remain adaptable, collaborative, and forward-thinking.

The Chefs

Source: https://defillama.com/protocols/dexes

As we approach 2025, several emerging trends are expected to further transform the DeFi landscape.

Availability Across Multiple Chains

Step-by-Step Process to Buy Crypto on PancakeSwap

Onramp Providers on PancakeSwap