PancakeSwap, a household name in the decentralized trading industry, announced the launch of its latest version called v4 before the end of 2024.

I summarized the the standouts from the White Paper & summarized them into key points, so you don’t have to!

• Modular Design: Think of PancakeSwap like an advanced LEGO set. Instead of being one big, fixed structure, it’s made up of smaller, interchangeable parts. This means if they want to add a new feature or change how something works, they can just swap out or add a new “block” without having to rebuild the whole thing. This makes the platform more adaptable to future changes in the crypto world. V4 allows the developers to adjust the infrastructure in a much more timely and efficient manner than the previous models gave the capacity for.

• Customizable Liquidity Pools: Liquidity pools (LP’s) are what allow users to exchange one asset for another, in this instance — cryptocurrency! In V4, when someone creates a new pool, they can add unique features to it which were previously unavailable. For example, they could set up a pool where the fees change based on market conditions, or one that has a unique way of managing the coins in the pool. This allows for more creativity and potentially better-performing pools. All with the intention of providing a more user-friendly and effective experience.

• Gas Savings: PancakeSwap v4 uses several clever techniques to reduce gas fees, especially for users who trade frequently. Paraphrasing their WhitePaper: “In PancakeSwap v3, deploying a separate contract for each liquidity pool increased gas expenses for pool creation and multi-pool swaps. In contrast, PancakeSwap v4 consolidates all pools into a single contract. This eliminates the need to transfer tokens between different contracts during multi-hop transactions, significantly reducing gas costs.” In layman’s terms this just means that by bundling multiple transactions together, you’re not having to pay for each one separately. This will be especially helpful for frequent traders, as those costs can add up over time.

• Easier Liquidity Mining: If you provide coins to trading pools (becoming a “liquidity provider”), you can now earn reward tokens more easily without the extra steps. In previous versions, you had to add your coins to a pool and then separately “stake” them to earn rewards. In v4, you start earning rewards automatically as soon as you add your coins to a pool. This makes the process simpler and more straightforward.

• Native Token Support: Many blockchains have their own primary coin with the capacity to use for transaction fees, like ETH for Ethereum. Previously, to use these in trading pairs on PancakeSwap, to conduct these trades a step had to be taken to convert them into a special “wrapped” version first such as wrapped-Ethereum (WETH). Now, v4 will allow you to use these native coins directly, saving you an extra step and potentially some fees. **keep in mind during the initial launch V4 will only support the ETH and BNB blockchains, however the others from V3 will be integrated shortly thereafter.

The overall goal is to make PancakeSwap more adaptable to future changes in the crypto market, while also making it cheaper and easier to use for regular traders and liquidity providers.

PancakeSwap v4 aims to address the shortcomings of current market makers, enhance the DEX experience, and evolve into the highest-functionality DeFi platform supported by our open-source approach.

If you have any further questions, feel free to reach out to the Chefs at PancakeSwap via their official Twitter and/or Discord, or check their official documentation.

Cheers to innovation, my friends!

“Nasdaq Nico” — #PancakeLord