More cherry on CAKE? PancakeSwap launches on Ethereum L2 rollup
- PancakeSwap claimed V3 will offer maximum capital efficiency and a flexible trading fee structure.
- Fees and user activity on the DEX continued its slide in August.
Not just centralized crypto exchanges, but even their decentralized counterparts have seen decreasing trade volumes in the last three months. In fact, the month of August looked set to record the lowest monthly volume for the year, per data from DeFiLlama.
Read PancakeSwap’s [CAKE] Price Prediction 2023-2024
The second-largest decentralized exchange (DEX) PancakeSwap [CAKE] followed the broader market trend, extending its losing streak in August. Over the last 24 hours, the non-custodial exchange processed trades worth $239 million, representing a steep decline of 25%.
However, despite the gloomy market sentiment, PancakeSwap looked for ways to stay ahead of the curve with its strategic expansion plans.
PancakeSwap gets one more address
PancakeSwap announced the launch of its third iteration V3 on the Ethereum [ETH] layer-2 network Linea as part of its attempts to expand user base and mop up additional revenue. Like other networks, PancakeSwap V3 would enable token swapping and liquidity provisioning functionalities on Linea.
? PancakeSwap v3 Launches on @LineaBuild ⚪️
? Trade your favorite tokens & enjoy one of the lowest trading fees in the industry
? Say hello to enhanced liquidity provider returns and capital efficiency
? Discover the future of DeFi on Linea Mainnet: https://t.co/a90nuUqLAF pic.twitter.com/zQx98u3EzQ
— PancakeSwap?Everyone's Favorite D3X (@PancakeSwap) August 24, 2023
PancakeSwap claimed that with the capital efficiency feature of V3, liquidity providers (LPs) would be able to significantly enhance their earnings, achieving a capital multiplier of up to 4000x compared to v2.
Furthermore, V3 would provide flexibility for traders to choose a fee structure that works best with the tokens they wanted to trade and the liquidity pool they are engaged with. The fee tiers would range from 0.01% to 1%.
Linea, a zero-knowledge Ethereum Virtual Machine (zkEVM) rollup, was introduced by Metamask developer ConsenSys in July. It recently completed the final stages of its mainnet launch.
How much are 1,10,100 CAKEs worth today?
Steady decline in usage could be a cause for worry
While the above development was noteworthy, LPs might be spooked by looking at the steady descent in fees and traders on the platform, as revealed by data from Token Terminal.
At the time of writing, native token CAKE exchanged hands at $1.26, per CoinMarketCap. Surprisingly, despite the expansion into Linea, this represented a drop of 1.58% in the 24-hour period.