PancakeSwap announces v4 with custom pools and gas optimization

PancakeSwap Releases Version 4 Codebase and White Paper for Web 3.0 Decentralized Exchange

The highly-anticipated version four of PancakeSwap’s codebase and white paper have been unveiled on March 15, marking a major milestone for the popular decentralized exchange. This new version, which is set to launch in the third quarter of 2024 on the Ethereum and BNB networks, promises to bring even more advanced features to the world of Web 3.0.

One of the key advancements in version four is the introduction of custom liquidity pools and flash accounting. These features aim to reduce gas costs for users and prevent impermanent loss for liquidity providers (LPs). Additionally, the PancakeSwap team has announced the creation of a development fund to support the ongoing evolution of the protocol.

PancakeSwap is currently the third-largest decentralized crypto exchange, with over $2.3 billion of assets locked across nine different networks. This impressive figure, as reported by DefiLlama, highlights the platform’s growing popularity and importance in the Web 3.0 ecosystem.

Introducing Hooks: The Customizable Add-Ons of Web 3.0

One of the most exciting features of PancakeSwap’s version four is the integration of “hooks.” These customizable add-ons, developed by independent developers, enable liquidity pools to offer dynamic fees, custom oracles, and active liquidity management modules. This opens up a whole new world of possibilities for LPs and users, making the exchange even more versatile and user-friendly.

With the release of version four, PancakeSwap solidifies its position as a leading player in the Web 3.0 landscape. Its innovative features and commitment to ongoing development make it a force to be reckoned with in the rapidly-evolving world of decentralized finance.

Understanding Web 3.0 and Its Impact on Decentralized Exchanges

Web 3.0, also known as the “decentralized web,” is gaining traction in the crypto world. This new version of the web supports liquidity book pools, a feature that sets it apart from traditional pools that follow the X*Y = K formula. With the X + Y = K formula, liquidity providers experience no impermanent loss and traders face no price impact when trading within a bin.

One of the major changes in Web 3.0 is the consolidation of all pools into a single contract, known as the “singleton” model. This move aims to reduce gas costs, especially for multi-hop trades that require more than one swap. Additionally, the v4 protocol implements “flash accounting,” which optimizes the accounting process and further lowers gas costs.

The team behind Web 3.0 has released the code under an open-source license, allowing developers to fork it and apply to become official “affiliates.” A $500,000 developer program has also been launched to fund independent developers in creating hooks for v4.

As the crypto user base grows, decentralized exchanges are constantly innovating to attract more users. Recently, Uniswap announced the release of a web extension wallet with its exchange built-in. In November 2023, the exchange introduced a “gauges” voting feature, giving PancakeSwap’s (CAKE) tokenholders the power to vote on which pools receive additional rewards.

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