Author: Ignas, DeFi Researcher

Compiled by: Leo, BlockBeats

 

PancakeSwap has just launched a new version V3, which is also a fork of Uniswap V3. The difference is that its new version focuses on enhancing user experience and ease of use. DeFi researcher Ignas wrote an article about "New Features of PancakeSwap V3", which is compiled as follows:

First, let’s review the development history of Uni: Uniswap V2 was launched in the summer of DeFi in 2020, adding color to the already hot DeFi market. Soon after, many forks appeared, making Uni V2 the most forked DeFi protocol in history, and PancakeSwap was one of them.

In an era when Uniswap was unwilling to deploy on any chain other than Ethereum, forks made sense. Due to this "reluctance" and ETH's high gas fees, a Uni V2 fork appeared on each layer. PancakeSwap launched a forked version of Uni and quickly dominated the BSC chain. Its current TVL is US$3.4 billion.

Then came Uniswap V3, which was launched two years ago, but Uniswap previously had a license prohibiting forks, valid until April 1, 2023. Uniswap brought several improvements to its V3, namely:

-Concentrated liquidity brings up to 4,000 times capital efficiency;

- Multiple fee tiers;

Many DEXs cannot fork Uniswap V3 before the Uni license expires, so they must innovate to gain a competitive advantage, such as:

-Trader Joe’s liquidity book;

-Elastic for KyberSwap;

-Velodrome’s ve (3,3) token economy;

-Dodo’s proactive market making.

Likewise, PancakeSwap adds unique features:

-Easy to use binary options

-On-chain spinach

-Through Perps in partnership with ApolloX

- New mining opportunities

-It also improves CAKE’s token economics and adopts multi-chain technology.

I think the most interesting PCS upgrade is the market maker (MM) integration, this feature can provide lower fees and more suitable prices and low TVL without spending CAKE incentives. But it is not easy to facilitate high TVL on Ethereum, here are more details about MM integration:

In short: PancakeSwap has always focused on retail investors.

So, I was surprised that PCS V3 is a fork of Uniswap, because V3 is difficult to use for beginners. For example, concentrated liquidity is good for efficiency, but LPs need to actively manage positions.

Fortunately, PCS will soon launch an automatic position manager that will enable one-click liquidity deposits and keep liquidity within a certain range to easily earn fees and mining rewards.

PCS also improves two other shortcomings of Uniswap V3:

-Automatic APR display, which provides real-time APR data for V3 LP based on liquidity, historical volume and position configuration, eliminating the need for third-party tools;

- Improved ROI calculator, which enables V3 LPs to estimate yield and impermanent loss, making it easy to adjust positions without complex, time-consuming calculations;

Two other useful upgrades are:

- Advanced built-in limit orders (coming soon) with integration of V3, V2, StableSwap or market makers for liquidity;

-Supports various transaction fee tiers, namely 0.01%, 0.05%, 0.25% and 1%, and already supports BSC and Ethereum;

In summary, PancakesSwap V3 deepens the features that PCS has always been proud of, improving the user experience and incentives for retail investors while benefiting from the capital efficiency of Uni V3.

Finally, will PancakeSwap V3 add color to DeFi like Uniswap did?