PancakeSwap Unveils Version 4: Making On-Chain Trading Cheaper and More Efficient

PancakeSwap, a popular decentralized exchange (DEX), is set to release its highly anticipated version 4 (v4) later this year, with the aim of making on-chain trading more cost-effective and efficient for users. The new version will introduce four key features: hooks, custom pool types, singleton, and flash accounting.

According to developers, PancakeSwap v4 will address the current shortcomings of automated market makers (AMMs), such as inflexibility in pricing models for assets, lack of centralized exchange (CEX)-level execution functions, impermanent loss for liquidity providers, and high on-chain gas fees for users. The head developer, Chef Mochi, stated that the v4 code will be released under an open-source license.

One of the standout features of PancakeSwap v4 is hooks, which are externally deployed contracts that allow developers to add customizable add-ons. These add-ons enable changes to the type of fees charged for a trade and the type of trading order, such as limit or market orders. Hook creators have the option to keep fees for themselves or distribute them to stakeholders.

Additionally, custom pool types will offer various liquidity pool options to users, aiming to provide better pricing of listed assets and prevent wild fluctuations in token prices during times of high demand or selling pressure. The singleton feature will merge all pools into a single contract, reducing deployment costs by 99% and lowering gas costs for swaps by eliminating the need to transfer tokens between separate contracts.

Furthermore, the flash accounting feature will settle a group of transactions collectively, reducing gas consumption and making trading more cost-effective, especially during times of market volatility when gas fees tend to surge.

PancakeSwap v4 is scheduled to be available on the Ethereum and BNB Chain networks in the third quarter of this year. The DEX currently holds $2.4 billion worth of tokens locked in liquidity pools and other services, with $1.7 billion in trading volumes processed in the past 24 hours, according to DefiLlama data.

Overall, the release of PancakeSwap v4 is expected to bring significant improvements to the decentralized trading experience, offering users enhanced pricing, reduced gas consumption, and lower deployment costs. The open-source nature of the code also reflects the project’s commitment to transparency and community involvement in the development process.