Key Takeaways:
- PancakeSwap Infinity introduces multiple pool types for better capital efficiency.
- New “Hooks” system enables custom trading and liquidity incentives.
- Gas fees are slashed by up to 99% for faster, cheaper transactions.
Table of Contents
A New Era: PancakeSwap Infinity Is Now Live
PancakeSwap Infinity, the latest major upgrade of PancakeSwap (formerly v4), has officially launched, setting a new benchmark for decentralized finance (DeFi). Designed for traders, liquidity providers, and developers alike, PancakeSwap Infinity brings powerful new features that aim to maximize flexibility, lower costs, and unlock limitless innovation.
The rebrand to “Infinity” reflects the protocol’s ambition to symbolize boundless potential, where innovation is limitless. PancakeSwap’s team emphasized that Infinity is built as a community-driven platform, offering open-source access so anyone can contribute, collaborate, and innovate across DeFi.
Starting with BNB Chain, PancakeSwap Infinity plans to expand to more chains soon, offering multichain liquidity opportunities from the ground up.
Multiple Pool Types: Tailored Liquidity Strategies
PancakeSwap Infinity introduces multiple pool types to allow liquidity providers to customize strategies according to different market conditions.
CLAMM: Concentrated Liquidity for Maximum Efficiency
The CLAMM (Concentrated Liquidity AMM) model empowers liquidity providers to concentrate assets within a specific price range. By increasing capital efficiency and minimizing price impact, the approach becomes ideal for volatile trading pairs. For instance, in pairs like ETH/USDT, providers can focus liquidity around current market prices to maximize fees with less capital.
Benefits of CLAMM include:
- Higher capital efficiency with narrower ranges.
- Lower gas costs when adding liquidity broadly.
- Flexible strategies suitable for both volatile and stable pairs.
LBAMM: Simplicity and Zero Slippage Trading
For those seeking a hands-off strategy, PancakeSwap Infinity also supports LBAMM (Liquidity Book AMM). Inspired by Trader Joe’s model, LBAMM splits liquidity into price bins, allowing trades within each bin to occur without any slippage.
LBAMM is best suited for low-volatility pairs like stablecoins, offering:
- Zero slippage on trades within bins.
- Fungible liquidity tokens (ERC-20 format) for easier adjustments.
- Lower complexity for passive liquidity providers.
These two pool options allow users to adapt liquidity strategies based on risk appetite and market dynamics, a flexibility that few other decentralized exchanges currently offer.
PancakeSwap Custom Fee Structures: More Control, Smarter Earnings
PancakeSwap Infinity removes the old fixed fee model, offering dynamic or static fee structures to give liquidity providers full control over earnings.
- Static Fees provide predictability by locking in a constant trading fee.
- Dynamic Fees adjust automatically based on market volatility, trading activity, or custom incentives like volume-based discounts.
For example, liquidity providers during volatile events like a major Bitcoin move can choose dynamic fees to capture higher returns when trading volumes surge.
By allowing choice between stability and adaptability, PancakeSwap Infinity ensures liquidity providers can optimize returns based on individual strategies and market conditions.
PancakeSwap Hooks: Customization Tools for Traders and LPs
PancakeSwap Infinity introduces Hooks, a groundbreaking feature that allows external developers and projects to deploy custom add-ons, enhancing pool functionality.
Hooks can be used to:
- Offer dynamic trading fee discounts based on trading volume or token holding.
- Reward liquidity providers with bonuses during periods of high volatility.
- Automate liquidity strategies for better yield optimization.
For example, a VIP Discount Hook will soon allow high-volume traders to enjoy lower fees automatically, making PancakeSwap Infinity highly competitive even against centralized exchanges.
By integrating programmable logic into every trade and pool, Hooks open up endless opportunities for personalization in DeFi.
PancakeSwap Gas Savings: Faster and Cheaper Than Ever
One of PancakeSwap Infinity’s most significant upgrades lies in its gas optimization technologies, cutting user costs dramatically.
Singleton Contracts and Flash Accounting
Thanks to the Singleton Contract structure, all liquidity pools now share a single smart contract. Pool creation costs are slashed by up to 99%, offering a huge benefit for developers and liquidity providers alike.
Moreover, Flash Accounting processes multiple actions at once, reducing the overall gas needed for each swap.
Native Token Efficiency and ERC-6909 Standard
Swapping native ETH or BNB now costs 50% less gas compared to swapping ERC-20 tokens, making frequent trading much cheaper. On top of that, the ERC-6909 accounting model reduces redundant token transfers, leading to even more savings for active users.
An additional feature, Donate(), allows users to directly reward liquidity providers with minimal gas fees, helping build a more sustainable and incentivized liquidity ecosystem.
PancakeSwap Open-Source Commitment: Building DeFi Together
PancakeSwap Infinity’s code is fully open-source, empowering developers to modify, innovate, and collaborate without restrictions. By embracing open values, PancakeSwap hopes to strengthen the DeFi community and push technological boundaries faster.
In a market often dominated by proprietary platforms, PancakeSwap Infinity stands out as a platform by the community, for the community, inspiring a more open, collaborative future for DeFi.
