PancakeSwap makes the strategic move of going live on this network
- PancakeSwap’s monthly DEX volume fell 54% in June.
- Polygon zkEVM lagged behind other scaling solutions in terms of liquidity.
Popular decentralized exchange (DEX) PancakeSwap [CAKE] announced the launch of its third iteration, V3, on the Polygon zkEVM chain, as part of its continuing attempts to expand and mop up additional revenue.
Read PancakeSwap’s [CAKE] Price Prediction 2023-2024
Unlike other big players in the ecosystem which are built on the Ethereum [ETH] network, PancakeSwap was originally launched on the BNB Chain in 2020. But the DeFi behemoth has branched out since then. It has added Ethereum, Aptos [APT] and now Polygon zkEVM to its fold.
The DEX’s native token, CAKE, responded enthusiastically to this development. The token rose 4.44% to $1.5451 at the time of writing, according to CoinMarketCap data. Like other networks, PancakeSwap V3 would enable token swapping and liquidity provisioning functionalities on Polygon zkEVM.
However, the most important aspect of the launch would be the introduction of concentrated liquidity which has become a rage in the decentralized finance (DeFi) world. PancakeSwap launched its V3 by copy-pasting the code of Uniswap [UNI], the pioneer of this feature.
PancakeSwap sees a rough June
At the time of writing, PancakeSwap was the second-largest DEX, registering a volume of $221.5 million in the last 24 hours, according to DeFiLlama. However, volumes in June have been tepid, a marked decline from the memecoin frenzy seen in May which drove record number of users to DEXes. The monthly drop as of this writing amounted to 54%.
Moreover, the total worth of assets held by the DEX was in a steady two-month downtrend. The total value locked (TVL) was $1.92 billion at the time of writing. This showed a 43% plunge after stakers deserted the protocol following its controversial proposal to lower token rewards.
Due to a drop in trading volume, the DEX’s revenue, or the share of the trading fees that goes to the CAKE holders, ebbed considerably in June.
How much are 1,10,100 CAKEs worth today?
Polygon zkEVM falls behind
Meanwhile the addition of PancakeSwap to Polygon zkEVM could just be the impetus the latter needed. The zero-knowledge rollup (zk-rollup), launched with much fanfare in March, has consistently lagged behind its competitors in terms of liquidity.
As per DeFiLlama, the TVL of zkEVM was $39.94 million at press time, a fraction of zkSync Era’s figure of $679 million which was launched around the same time. Polygon’s scaling solution also lagged behind another zk-rollup StarkNet whose TVL was $68 million.