PancakeSwap’s v4: Custom Pools and Gas Optimization
PancakeSwap, a decentralized exchange, has unveiled its version four codebase and white paper. The updated version includes features such as custom liquidity pools and flash accounting, aimed at reducing gas costs for users and preventing impermanent loss for liquidity providers. The team behind PancakeSwap plans to establish a development fund to support further advancements of the protocol.
Currently, PancakeSwap is the third-largest decentralized crypto exchange, with over $2.3 billion of assets across nine different networks. The team aims to launch version four on the Ethereum and Binance Smart Chain networks by the third quarter of 2024. The new version introduces “hooks,” customizable add-ons that independent developers can create to enhance specific liquidity pools.
One notable feature of the version four update is the introduction of liquidity book pools. Unlike traditional pools that adhere to the X*Y = K formula, liquidity book pools utilize the X + Y = K formula. PancakeSwap claims that this new pool type eliminates impermanent loss for liquidity providers and prevents price impact for traders.
To minimize gas costs, the developers have consolidated all pools into a single contract, adopting a “singleton” model. This change is aimed at reducing the expenses associated with multi-hop trades that require multiple swaps. The version four protocol incorporates flash accounting, optimizing the accounting process and further reducing gas costs.
The new code will be released under an open-source license, allowing developers to fork it for their own projects. Interested developers can become “affiliates” and receive official recognition from the PancakeSwap team. PancakeSwap has introduced a $500,000 developer program to fund independent developers creating hooks for version four.
In the competitive landscape of decentralized exchanges, platforms are actively trying to implement new features to attract users. For instance, on February 27, Uniswap announced the release of a web extension wallet with built-in exchange functionality. In November 2023, PancakeSwap introduced a “gauges” voting feature that allows tokenholders to vote on additional rewards for specific pools.
9 thoughts on “PancakeSwap’s v4: Custom Pools and Gas Optimization”
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PancakeSwap is really stepping up its game in the competitive world of decentralized exchanges. The new features and constant innovation are what make it stand out. Keep up the great work, team!
Gas costs are already high, and this update doesn’t seem to address that properly.
I don’t like the idea of allowing developers to fork the code for their own projects. It could lead to security issues.
Consolidating all pools into a single contract is such a smart move by PancakeSwap. Gas costs will definitely be minimized, making trading much more affordable. Kudos to the team for their innovation!
It’s frustrating to see PancakeSwap copying features from other exchanges instead of being innovative.
Why do they keep making changes instead of fixing existing issues?
I don’t see the point of becoming an affiliate for PancakeSwap. What’s in it for developers?
PancakeSwap’s version four codebase and white paper are a delight to read. The team’s dedication to improving user experience and minimizing gas costs is truly commendable. Here’s to a decentralized future!
The introduction of liquidity book pools doesn’t convince me that impermanent loss will be eliminated.