Tag: Automated Market Maker

PancakeSwap Launches V3 with Lower Fees and Enhanced Capital Efficiency

by Blockchain News

Decentralized finance (DeFi) protocol PancakeSwap has launched version 3 of its automated market maker platform on BNB Chain and Ethereum, with the upgrade encompassing performance improvements and lower fees.

PancakeSwap is a popular DeFi platform that enables users to trade cryptocurrencies without intermediaries. It operates as an automated market maker (AMM), meaning that it relies on a smart contract to determine the price of tokens based on the ratio of supply and demand.

One of the key features of PancakeSwap V3 is enhanced capital efficiency. In the previous version of the platform, liquidity from providers (LPs) was distributed uniformly along the price curve of trading pairs. This approach was considered inefficient because assets typically trade within certain price ranges. V3 allows liquidity providers to select a custom price range to provide liquidity, allowing specific control over capital investments to higher volume trading ranges.

Moreover, PancakeSwap V3 features four new trading fee tiers ranging from 0.01% to 1%, which is a change from V2’s standard 0.25%. Every token pair can have liquidity pools for each tier. PancakeSwap expects asset pairs to be drawn to tiers where incentives for LPs and traders align. This approach is an effort to balance between traders targeting the lowest fees while still incentivizing LPs. The higher percentage trading fee tiers cater to assets that have higher impermanent loss or lower liquidity. This mechanism intends to provide more fee revenue and incentive for LPs.

PancakeSwap caters to a broad DeFi user base, accounting for over $2.5 billion of total value locked and serving over 1.5 million unique users. The platform also revealed upcoming features that are still in development, including a trading rewards program incentivizing traders with exclusive benefits, while a position manager feature aims to improve user experience when depositing tokens as liquidity.

In other news, Arbitrum (ARB) has been in the spotlight in March, with its highly-anticipated airdrop consolidating around $3.3 million from over 1,400 addresses into two controlling wallets. Arbitrum is a layer-2 scaling solution for Ethereum that aims to improve its scalability and lower its transaction fees. Its airdrop has generated significant interest from DeFi enthusiasts who are looking for new opportunities to earn rewards.

In summary, PancakeSwap V3 is a significant upgrade that aims to improve capital efficiency and lower trading fees. It also features four new trading fee tiers that cater to different types of assets and traders. With over 1.5 million unique users and more upcoming features in development, PancakeSwap is likely to remain a popular DeFi platform.

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Top Crypto Trader Predicts 84,407% Price Explosion for Little-Known Altcoin Built on Ethereum

by Dailyhodl

A long-time crypto trader known as Flood is showing support for an altcoin that helps bridge the gap between different types of blockchain projects.

Flood tells his 194,400 Twitter followers that there are several reasons why he thinks trustless automated market maker Synapse (SYN) has the potential to make insane gains over the next two years.

“Here’s some simple math, the EVM [Ethereum Virtual Machine] smart contract platforms have a combined $700 billion market cap and are projected to reach $12 trillion by 2023.

With Synapse’s superior user experience, hyper-efficient liquidity providing and one of the greatest developer teams in crypto, it’s sure to become the leading cross-chain bridge in the world and capture at least 10% of that market cap, $1.2 trillion, by 2023.

That puts the price target at $2,400 per SYN. Let the bears and fudders (fear, uncertainty and doubters)  sell all they want, I will keep accumulating.”

The Ethereum Virtual Machine is a blockchain-based software platform where developers build decentralized applications (DApps). It eliminates the need for sophisticated hardware while creating smart contracts.

At time of writing, SYN is up over 10% on the day to $2.84. At Flood’s price target of $2,400 per token, that would signify a mind-boggling 84,407% gain for the 181st-ranked crypto asset.

According to the Synapse project website,

“By providing decentralized, permissionless transactions between any L1, sidechain or L2 ecosystem, Synapse powers integral blockchain activities such as asset transfers, swaps, and generalized messaging with cross-chain functionality.”

The SYN token entitles holders to vote on governance issues on the SynapseDAO (decentralized autonomous organization) as well as pays for network gas fees.

Another popular crypto analyst who goes by the name of Smart Contracter is also interested in Synapse.

The pseudonymous Twitter personality says,

“With all the layer ones competing against each other, accumulating something that bridges them all together feels like a picks-and-shovels play to me.

SYN chart looks amazing against ETH here on the weekly and allows you to bridge to almost every single chain from any chain.”

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Source: Smart Contracter/Twitter

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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Mono X launches mainnet on Ethereum and Polygon

by Cointelegraph

Automated market maker (AMM) MonoX has announced the official launch of its mainnet platform, offering investors a full complement of swap and liquidity capabilities on the Ethereum and Polygon blockchain networks.

With the release of this new service, Mono X is aiming to establish a cost-effective and accessible infrastructure for liquidity providers seeking to propel their projects to the market and traders interested in engaging in token swap services.

In the case of traditional decentralized exchanges (DEXes) such as dYdX, it is necessary for projects to provide two tokens to build a liquidity pair, a requirement that increases the capital barrier for entry. With the single-sided liquidity feature, projects only need to stake their native token, which means that they can offer more overall liquidity to the market.

According to the official announcement, the liquidity pools implemented upon launch are as follows: On Ethereum, assets include Ether (ETH), Wrapped Bitcoin (WBTC), USD Coin (USDC) and Tether (USDT), while on Polygon, assets include Polygon (MATIC), WBTC, USDC, USDT and Wrapped Ether (WETH).

Last month, the AMM raised $5 million in capital funding to support the decrease of mandatory capital and liquidity levels for decentralized finance (DeFi) projects offering swap, borrowing and lending derivative services on DEXes.

At the time, the project was still in beta development, but this announcement marks a transition to full-scale implementation in the DeFi space.

MonoX CEO Ruyi Ren told Cointelegraph  how MonoX is utilizing single-sided liquidity pool innovation to reduce the barrier-to-entry for new DeFi participants:

“Protocols that use liquidity pairs result in capital requirements to participate in DeFi being high. With our model, all you need to do is deposit your own token to the pool (0 collateral). Project owners can list their tokens without the burden of capital requirements and focus on using funds for building the project instead of providing liquidity.”

Related: DeFi liquidity pools, explained

In addition, Ren spoke of the potential impact Value Backed Tokens could have on the wider DeFi ecosystem:

Value Backed Tokens (VBT) are tokens that are already backed by other assets. Financial derivatives, game tokens, NFT shards, DAO tokens, and even some stablecoins all fall into this category. With MonoX, we don’t require extra collateral so once a staked Ether is minted, it can be tradable on MonoX with zero capital requirement.