Decentralized exchanges across the world have been on a rapid expansion spree, to be able to cater to more and more blockchain networks in the space. Uniswap, the largest DEX and trading protocol by market cap has captured a large section of the market but competitors are beginning to catch up. One of its closest competitors, PancakeSwap, is also making major strides in the space.

PancakeSwap, which was initially built and launched on the BNB Chain, with more than 1.5 million unique users, introduced its Version 3 on the Ethereum and BNB Chain networks later on April 3. PancakeSwap is a major player in the DEX & AMM sector of decentralized finance (DeFi), and accounts for over $2.4 billion in total-value-locked (TVL).

PancakeSwap has upped the game by offering the cheapest fees for on-chain trading when compared to other competitors like SushiSwap and Uniswap and also increased returns for liquidity providers. It is also set to offer a new set of tools to improve overall customer experience too.

PancakeSwap V3 also introduces features that are expected to enhance the platform's overall capital efficiency. These features include allowing liquidity providers to concentrate their capital on smaller price ranges, which results in higher fee earnings from the same amount of deposits, developers told CoinDesk.

V3 is also set to introduce 4 different trading fee tiers, 0.01%, 0.05%, 0.25%, and 1%, whereas V2 only offered a single tier of 0.25%. Each token pair on the platform can have a liquidity pool for each fee tier, with asset pairs gravitating towards the tier where incentives for both liquidity providers and traders are more rewarding.

This approach was designed with the idea to ensure a balance between traders opting for the lowest fee tier while still incentivizing the higher possible liquidity from LPs.

The platform also revealed a few more of its upcoming features that are still in development including a trading rewards program, incentivizing traders with exclusive benefits, dubbed a V3 "VIP" trading rewards program, and a position manager feature. This position manager feature will allow traders to easily deposit liquidity and optimize that position, based on fees and rewards, over time. This tool also will eliminate the need for manual calculations for third-party integrations, and that would enable users to automatically adjust their positions and earn fee rewards while staying within range. These are in development and are expected to be released soon.

Read more: Uniswap V/S PancakeSwap

PancakeSwap is one of the fastest-growing decentralized exchanges in the space and runs on just three chains, it now has over $2.4 billion in total-value-locked in DeFi. While a lion's share of the TVL is contributed by the BNB Smart Chain and it was built for BSC too, it is gaining momentum on the other chains too!

Thus, overall PancakeSwap has a series of functionalities and features set to be released and also underway to make it a very exciting project to look out for. Considering its positioning in the DeFi landscape, it is now currently integrated with only three chains but is already catching up to Uniswap. As we see more chain integrations coming up, we could see far stronger growth in this project as a whole.

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