PancakeSwap Unveils Fourth Version of Its Protocol

The decentralized exchange (DEX) PancakeSwap is set to launch the fourth version of its protocol on the Ethereum and BNB Chain networks in the third quarter, introducing a range of innovations. This was reported by CoinDesk, citing a statement from the developers. 

The platform’s team aims to enhance the functionality of the automated market maker (AMM) to make trading “cheaper and more efficient for users.”

“The PancakeSwap v4 code will be released under an open-source license. It addresses the shortcomings of current AMMs, including inflexible pricing models for assets, lack of execution features at the level of centralized exchanges, losses for liquidity providers, and high gas fees,” stated the lead developer under the pseudonym Moti.

Following the update, the DEX will feature “hooks” that allow for additional trading settings at the smart contract level.

Enhanced liquidity pools will provide more favorable and accurate prices for popular assets, Moti added. This will help prevent sharp price fluctuations during periods of high trading volumes. 

The Singleton solution will consolidate all liquidity pools into a single contract to “reduce deployment costs by 99%.” This will also lower swap fees. 

The flash accounting feature will enable the grouping of transactions, reducing gas costs.

According to DeFi Llama, the total value locked on PancakeSwap stands at $2.35 billion at the time of writing. 

As per CoinGecko, the exchange’s native token CAKE is trading at $4.72, having gained 14% in 24 hours. Its market capitalization has reached $1.15 billion.

In December 2023, the PancakeSwap community supported a proposal to reduce CAKE’s emission from 750 million to 450 million. Earlier, developers burned 10 million CAKE worth $34 million. 

In November, the DEX launched a gaming marketplace supporting NFTs and the CAKE token.