What's New in PancakeSwap v4: A Glimpse Into the Future of DeFi
Building upon the foundational principles of the AMM, PancakeSwap v4 support Hooks, custom pool types and gas optimisations setting the stage for continuous improvement and innovation on DEX functionality.
Let's delve into the critical offerings for Developers, DeFi protocols, Traders, and Liquidity Providers:
For Developers: Building Hooks for a Custom DEX Experience
1. Build Hooks: Developers can now add custom functionalities for swappers and liquidity providers permissionlessly. Deploy pools with custom Hooks, setting parameters for dynamic fees, on-chain limit orders, take-profit orders, and more. Enable new ways of interacting with DEXs previously unavailable in v3.
2. Customized Pools: PancakeSwap v4 supports deployment of new pool types, with out-of-the-box support for the CLAMM and liquidity Book model. PancakeSwap v4 is the first DEX to support any pool type with Hooks, enhancing capital efficiency and trading flexibility.
3. Revenue Stream: Developers can generate a consistent revenue stream through Hook fees, which allows developers to set fees for utilizing their Hooks.
4. Extensive User Base: Exposure to showcase and build innovative Hook for PancakeSwap's active user base of 1.8M.
For DeFi Protocols: A wide range of opportunities
1. Userbase: DeFi protocols gain access to PancakeSwap's robust liquidity pools and 1.8M monthly active user base, providing a ground for product development and adoption.
2. New Innovative Opportunities with Hooks: This opens up a new realm of possibilities with different Hooks ideas to experiment and address the limitations of existing AMM designs.
3. Different Pricing Curves through multiple pool types: Introducing different types of pools and pricing curves, including concentrated liquidity and the bin type, enables DeFi protocols to cater to seed liquidity in different pricing curves.
For Traders: Enhancing the Trading Experience
1. Dynamic Fees: Traders can now enjoy dynamic fee structures than only 4 tiers in v3. Hooks can set varying fees, offering a customizable fee experience for traders.
2. Advanced Trading Tools: v4 brings advanced tools to traders, such as limit orders, take-profit orders, and TWAMM (Time-Weighted Average Market Making) through hooks. Experience a more advanced trading environment, unlocking a new level of trading possibilities.
3. Reduced Gas Fees: Say goodbye to high gas fees. With the introduction of Singleton and Flash Accounting, PancakeSwap v4 significantly reduces gas fees. Consolidating all pools into a single contract and adopting net balances after each swap minimize the need for gas-intensive token movements.
4. 0 Slippage Trades: Supporting multiple pool types, including the Liquidity Book model, enables traders to benefit from zero slippage trades within specific bins, ensuring the best possible trading experience.
For Liquidity Providers: Maximizing Returns and Capital Efficiency
1. Capital Efficiency: PancakeSwap v4 builds upon the concentrated liquidity concept, enhancing capital efficiency by allowing liquidity providers to supply assets within specific price ranges with multiple pool types. The hooks integration further empowers pool creators to introduce custom features for optimized liquidity management.
2. Mitigating Impermanent loss and Enhancing Liquidity Provider Earnings: We're exploring innovative strategies to double the net trading fees earned by liquidity providers (LPs). This initiative aims to offer more stable profitability to LPs and diminish their dependence on token incentives.
3. Gas Savings: LPs benefit from massive gas savings and operational efficiency through Singleton and Flash accounting.
Developers can start building on PancakeSwap immediately by reading the v4 whitepaper and codebase. For traders and liquidity providers, the DEX is set to go live on Ethereum and BNB Chain by the 3rd quarter of this year.
For an in-depth understanding of PancakeSwap v4's features and benefits, explore our whitepaper and v4 landing page.
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