PancakeSwap

PancakeSwap wants to cap token inflation rate at 3%–5% per year

“Staking Allocation to target approx. 0.35 – 1 CAKE/block instead of 6.65 CAKE/block,” developers wrote.

Decentralized exchange (DEX) PancakeSwap wants to lower its token inflation to anywhere between 3% and 5% per annum, far below current rates of over 20%.

In a proposal released on April 18, the DEX cited the need to transition CAKE (CAKE) into a staking model characterized by “low staking inflation,” “real yield drawn from PancakeSwap’s protocol revenues” and “product benefits favoring longer-term CAKE stakers.”

“This is a significant and important change for PancakeSwap,” the DEX wrote, while providing an opportunity for tokenholders to vote on appropriate changes and a feedback form to discuss them. Currently, PancakeSwap operates a high-token-emission model to incentivize high yields for protocol features such as liquidity pools and farm offerings, as well as removing tokens from circulation via high staking yields.

“We believe it is time to take this model to the next level and supercharge CAKE towards a deflationary model based on real yield and CAKE burn.”

According to developers, CAKE had a net emission rate of 40 per block at its inception in September 2020; it was reduced to 14.25 per block in May 2022, with the rate floating at 9.2 CAKE per block at the time of publication. Eventually, developers wish to implement “ultrasound CAKE,” with a net emission rate of lower than 2 CAKE per block.

“A >2 CAKE/block emission rate remains highly inflationary to existing CAKE holders and stakers.”

PancakeSwap is one of the most popular DEXs on BNB Chain. Last year, the DEX introduced a 750 million supply cap for CAKE, which currently has around 381.6 million tokens in circulation or locked in staking. Meanwhile, PancakeSwap’s total value locked amounts to $2.35 billion.

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PancakeSwap changes its recipe with the launch of Version 3

PancakeSwap has released version 3 of its BNB Chain, Aptos and Ethereum-based DeFi platform, touting improved performance and lower fees.

Decentralized finance (DeFi) protocol PancakeSwap has launched version 3 of its automated market maker platform on BNB Chain and Ethereum, with the upgrade encompassing performance improvements and lower fees.

Enhanced capital efficiency is cited as a key aspect of the upgrade, with a change in how liquidity providers can allocate capital on specific price intervals. In the previous version of PancakeSwap, liquidity from providers (LPs) was distributed uniformly along the price curve of trading pairs, which the platform notes was inefficient given that assets typically trade within certain ranges.

V3 allows liquidity providers to select a custom price range to provide liquidity, allowing specific control over capital investments to higher volume trading ranges. The release also touts the provision of four new trading fee tiers from 0.01%, 0.05%, 0.25%, and 1%, which is a change from V2’s standard 0.25%.

Every token pair can have liquidity pools for each tier. PancakeSwap expects asset pairs to be drawn to tiers where incentives for LPs and traders align, with the approach an effort to balance between traders targeting the lowest fees while still incentivizing LPs.

The PancakeSwap team unpacked the different trading fee tiers in correspondence with Cointelegraph. Assets such as stable pairs where impermanent loss is low (price changes after depositing to a liquidity pool) and prices typically match fall into the 0.01% tier.

The higher percentage trading fee tiers cater to assets that have higher impermanent loss or lower liquidity. This mechanism intends to provide more fee revenue and incentive for LPs.

PancakeSwap caters to a broad DeFi user base, accounting for over $2.5 billion of total value locked and serving over 1.5 million unique users.

The platform also revealed upcoming features that are still in development, including a trading rewards program incentivizing traders with exclusive benefits, while a position manager feature aims to improve user experience when depositing tokens as liquidity.

Arbitrum (ARB) has been front and center in DeFi-related news in March, with its highly-anticipated airdrop seeing around $3.3 million consolidated from over 1,400 addresses into two controlling wallets.

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Following launch hype, PancakeSwap wants to deploy mainnet on Aptos

Developers cite business development opportunities, protocol expansion and the technical capabilities of the Aptos chain as the main reasons for the proposal.

On Oct. 20, developers of the popular decentralized exchange, or DEX, PancakeSwap proposed deploying its mainnet on layer-1 blockchain Aptos.

Currently, PancakeSwap is based on BNB Chain and processes about $47 million worth of trading volume each day. However, its developers have introduced the DEX’s first multichain migration proposal after the launch of Aptos on October 17, writing:

“Aptos is a next-generation L1 with low transaction costs, high transaction throughput, and fast transaction speeds, utilizing a novel and developer-optimized approach to parallel execution. PancakeSwap has developed a strong relationship with the Aptos team, and a large number of its developer ecosystem are suitable for PancakeSwap partnerships and products.”

Should the proposal pass, developers will deploy four main features of the DEX, including swaps, farms, pools and initial farm offerings on Aptos by Q4 2022. As told by developers, this is to ensure that PancakeSwap can quickly establish itself as the leading DEX on Aptos.

The DEX’s native token, CAKE (CAKE), will also be natively available on the Aptos blockchain. A vote for the matter will commence on the platform tomorrow.

Aptos was founded by former Meta employees Mo Shaikh and Avery Ching, who also played a role in the firm’s failed stablecoin project, Diem. In July, Aptos Labs raised $150 million at a $1 billion valuation in a round led by FTX Ventures and Jump Crypto.

The project has attracted much attention from developers due to its backing and claim of being able to process 130,000 transactions per second (TPS). However, at the time of publication, the Aptos mainnet is only handling about 16 TPS, though it’s notably higher than the four TPS witnessed when its mainnet first launched three days prior.

On its first day of listing on Binance, the APT/USDT pair traded as high as $100 and as low as $1 before stabilizing at around $7 levels.

BNB Chain launches a new community-run security mechanism to protect users

The AvengerDAO was developed in association with some of the leading blockchain security analy firms and top DeFi projects in the crypto ecosystem.

BNB Chain, the native blockchain of Binance, has launched AvengerDAO, a new community-driven security initiative to help protect users against scams, malicious actors and possible exploits.

The security-centric decentralized autonomous organization (DAO) has been developed in association with leading security firms and popular crypto projects such as Certik, TrustWallet, PancakeSwap and Opera, to name a few.

The AvengerDAO security initiative mainly consists of three major components, namely a passive API system called Meter, a subscription-based alert system called Watch, and a programmable fund management system called Vault.

When a user on the BNB Chain interacts with any applications or counterparties, AvengerDAO adds an additional layer of security. The Meter API system fetches security ratings on smart contracts, domains, and addresses and alerts users in case of a security vulnerability. The Watch system alerts users in real-time about ongoing exploits, while the Vault acts as an escrow where the funds a only released once certain pre-set conditions are met.

Gwendolyn Regina, investment director at BNB Chain, explained how the community would be responsible for security decisions in an exclusive conversation with Cointelegraph. She said that the community would perform a survey of existing security auditing service providers to see what types of common security vulnerabilities exist. She added:

“We think that when additional professional security audit firms join the DAO as members, we will collectively get a deeper understanding of the security landscape, and work on enhancing it.”

Some of the AvengerDAO members, including security decentralized application (DApp) Hashdit, have already released an integration with PancakeSwap that would allow its users to fetch the security ratings of smart contracts with which they are interacting at the start of September.

BNB Chain has paid special attention to user security and has launched several initiatives over the past few months. Before the AvengerDAO launch, the BNB Chain launched Dappbay equipped with a novel feature called Red Alarm. This feature assesses project risk levels in real-time and alerts users of potentially risky DApps.

Within a month of its launch, the Red Alarm feature of DappBay identified over 50 on-chain projects that posed a significant risk to users. The security feature analyzed 3,300 contracts in July alone.

While Red Alarm was just meant to flag vulnerable smart contracts and projects that possess financial risk, AvengerDAO aims to become a multidimensional security initiative with a focus on detecting real-time vulnerabilities and exploits.

Here’s why Binance Chain (BNB) will face an important price test on September 30

BNB price has entered a symmetrical triangle formation, and the conflicting trends will decide the fate of the altcoin as it battles near $280.

BNB, the native token of Binance’s BNB Chain, entered a symmetrical triangle formation on Aug. 10, when it first faced the descending trendline at the $335 resistance. The following five weeks have been a struggle around $280, the exact intersection between the two conflicting ascending and descending patterns.

*BNB token/USD at FTX. Source: TradingView*

A decision on whether the symmetrical triangle will break to the upside or downside is expected by Sept. 30, when the trendlines cross. Currently holding a $45 billion total market capitalization, BNB Chain token has outperformed the broader altcoin market by 15% over the past three months.

The latest breakthrough in BNB Chain development was announced on Sept. 7, after the project introduced zero-knowledge (ZK) proof scaling privacy technology. The testnet is expected for November, aiming for faster finality and reduced transaction fees. Ethereum mastermind Vitalik Buterin also wants to implement a similar solution for the Ethereum network and he highlighted the importance of ZK in late 2021.

BNB Chain’s Ethereum-compatible network is fully functional, hosting decentralized applications (DApps), including decentralized exchanges (DEXs), games, collateralized loan services, social networks, yield aggregators and NFT marketplaces.

A decline in price deposits could be a red flag

Despite currently being 60% below its -time high, BNB remains the third largest cryptocurrency by market capitalization ranking, excluding stablecoins. Moreover, the network holds $6.6 billion worth of deposits locked on smart contracts, a term known as total value locked, in the industry.

Despite BNB price rallying 26.5% in the past 3 months, the network’s TVL measured in BNB tokens dropped by 12.5% in the same period. Usually, this data would be concerning, but it depends on how other competitors have fared.

*BNB Chain Total Value Locked, BNB. Source: DefiLlama*

In fact, lower smart contract deposits have been the norm across the industry. For example, Solana’s (SOL) TVL declined by 27.5% in 3 months, and Avalanche (AVAX) decreased by 36%. Even Ethereum saw a 29% cut in ETH deposits, down to 24.2 million from 34 million on July 17.

In dollar terms, BNB Chain’s current TVL of $6.6 billion gained 12% in the three months leading to Sept. 16. This figure is vastly superior to other Ethereum competitors, such Avalanche’s $2.2 billion or Solana’s $1.3 billion, according to data from DeFi Llama.

DApp use is on the rise, led by Gameta

To confirm whether BNB Chain’s TVL decline is accompanied by a reduction in users, investors should analyze decentralized application (DApp) usage metrics. Some DApps, such as games and collectibles, do not require large deposits, so the TVL metric is irrelevant in those cases.

*Top BNB Chain DApps by active addresses in 30-days. Source: DappRadar*

PancakeSwap, BNB Chain’s decentralized exchange, has 1.75 million active addresses, and is the absolute leader across all smart contract networks. Meanwhile, the Ethereum network only holds three DApps with more than 35,000 active addresses, namely Uniswap, OpeanSea and MetaMask Swap.

More importantly, three DApps using BNB Chain grew by 190% or higher, with Gameta being the most promising, with over 900,000 active addresses. BNB Chain critics will have a hard time if another application besides PancakeSwap consolidates its leadership across all smart contract networks.

Judging by the absolute numbers, meaning the 12.5% TVL decline in BNB tokens and the 14% reduction in active addresses on Binance Chain’s leading DApp, one could incorrectly conclude that BNB token is primed for a correction.

However, a more granular analysis, including a comparison with competitors, shows that the symmetrical triangle pattern crossing at $280 on Sept. 30 is likely a bullish trigger for BNB’s price.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

3 reasons why Binance Chain (BNB) rallied 66% since the crypto market crashed

BNB token holds a $50 billion market cap and has rallied 66% since the crypto market crashed, but what is behind the altcoin’s tremendous recovery?

BNB, the native token of Binance’s BNB Chain , has bounced 66% from its $183 low in mid-June. The move consolidates its position as the third-ranked cryptocurrency (when stablecoin market caps are removed) and reflects a $50 billion market capitalization. BNB has outperformed the broader altcoin market capitalization after a devastating 73% correction that began in November 2021.

*BNB token at FTX (blue) vs. Total market cap ex-BTC (orange). Source: TradingView*

The above chart displays how this smart contract blockchain network suffered during the recent market collapse and how similar movements happened across the altcoin market. Now that BNB price has reached $300, let’s take a look at how the asset is positioned compared to July 2021 when it traded for the same price.

Is BNB’s market cap and valuation justified?

Back in July 2021, the altcoin market capitalization stood 21% higher at $740 billion. Bitcoin (BTC) and Ether (ETH) had already established themselves as the market leaders, but the dispute for the third position was far from settled, at least in terms of the total value.

*Top coins by market cap on July 4, 2021. Source: Coinmarketcap*

Despite still being the third largest cryptocurrency, BNB’s market cap was $47 billion, while Cardano (ADA) held a $46 billion valuation. Currently, no altcoin remotely matches its dominance and the gap has widened by more than $30 billion.

Smart contracts form the foundation of all decentralized applications (DApps), including decentralized finance, gaming, marketplaces, social networks and many other use cases. So what other success metrics are there besides the number of active users using addresses as a proxy?

*Top DApps active addresses in 30-days, excluding gambling. Source: DappRadar*

PancakeSwap, BNB Chain’s decentralized exchange, has 1.98 million active addresses. The number is so massive that aggregating the next four competitors is not enough to match it. According to the data, the runner-up to BNB Chain is 1inch Network, which holds 91% fewer users.

For those questioning whether BNB Chain is a one-trick pony, the network holds a couple of games that have 83,000 or more active addresses each and 78,450 that use the 1inch Network. Asking whether PancakeSwap really holds that many users is a valid question, but the Ethereum network only holds three DApps surpassing 30,000 active addresses, namely Uniswap, OpeanSea and MetaMask Swap.

Smart contract deposits set BNB Chain apart from its competitors

One might argue that the total value of users’ deposits in smart contracts are critical to determining a network’s success. However, while it is highly valid for finance applications, there’s not much reason for marketplaces, games, collectibles and social networks to hold large deposits.

*Total Value Locked ranking, USD. Source: Defillama*

Currently, Ethereum is the absolute leader and the DApp hosting the algorithmic-backed DAI stablecoin has $8.25 billion worth of deposits. Still, this is more than justified by Ether’s $208 billion market capitalization, which is over four times higher than BNB with $50 billion.

Data shows a consolidated third place for BNB Chain with $5.5 billion in TVL, which is more than double Avalanche (AVAX) and Polygon (MATIC).

Binance leads in trading volumes

When accounting for the BNB’s valuation, especially in comparison to smart contract blockchains, there needs to be a different methodology because the token has additional utility on the Binance exchange. Furthermore, providing discounted trading fees, opportunities at the token sales launchpad and exclusive staking opportunities allow BNB to stand out among its competitors.

*Website visitors in the past 90 days. Source: Arcane Research*

Data from SimilarWeb shows Binance had 300 million website visitors in 30 days versus 121 million from Coinbase. Consequently, if FTX Token (FTT) holds a $5 billion market cap, BNB should be five times larger solely from Binance’s utility offer .

Therefore, when making a valuation comparison with smart contract platforms, analysts should discount nearly half of BNB’s $50 billion market cap for an equivalent metric. BNB token seems fairly priced due to its third place (when stablecoins are removed) in global market capitalization ranking, its leadership in DApps users, third place status in terms of TVL deposits and absolute dominance of exchange volumes.

BNB rallies 39% despite smart contract deposits dropping 28% — Should investors be worried?

BNB Chain’s total value locked dropped more significantly than its competitors, but the network’s decentralized applications are not fading out.

Cryptocurrencies’ total market capitalization bounced from $860 billion on June 30 to the current $1.03 trillion, a 20.6% relief in five weeks. Ether (ETH) might have been the absolute leader among the largest smart contract chains, but BNB managed to gain 39% over that period.

*BNB (blue) vs. Ether (orange), AVAX (cyan), SOL (yellow). Source: TradingView*

BNB token’s year-to-date performance remains negative by 43%, but the current $49.5 billion market capitalization ranks it the third largest, excluding stablecoins. Furthermore, the leading decentralized application (DApp) is PancakeSwap — 843,630 active addresses in the past seven days — which runs on BNB Chain.

The token serves primarily as a utility asset within the Binance exchange ecosystem, enabling traders to earn discounts or participate in token offers. So, technically, the BNB token does not give ownership rights or dividends to any Binance-owned company or service.

However, according to Bloomberg, the United States Securities and Exchange Commission (SEC) is investigating whether the initial coin offering (ICO) of BNB tokens in 2017 consisted of a sale of unregistered securities. A digital asset may fall under the SEC’s scrutiny if buyers intend to profit from the efforts of a company or project funded by the capital raise.

To understand whether BNB’s 39% rally in five weeks is justified, investors should analyze network use, including smart contract deposits, active users and decentralized applications adoption.

Mixed data from smart contract deposits and DApp usage

BNB Chain‘s primary decentralized application metric started to display weakness earlier in May as the network‘s total value locked (TVL) dropped below 24 million BNB.

*BNB Chain network Total Value Locked, BNB millions. Source: Defi Llama*

The chart above shows how BNB Chain‘s DApp deposits saw a 28% decline in three months as the indicator reached its lowest level since April 2021. As a comparison, Ethereum‘s TVL currently stands at 24.4 million ETH, an 11% decline over the same period. Moreover, another DApp competitor, Solana (SOL), saw a 2% TVL decrease to 50.2 million SOL.

On the bright side, on Aug. 3, the Binance exchange announced the launch of its first-ever token aimed at certifying verified user status on the platform. Binance Account Bound (BAB) token is a decentralized identity tool displayed to indicate that a wallet’s owner has passed Know Your Customer (KYC) verification on the exchange.

To confirm whether this drop in TVL should be concerning, one should analyze DApp usage metrics. Some DApps are not financially intensive, so the value deposited is irrelevant.

*BNB Chain’s most used DApps over seven days. Source: DappRadar*

As shown by DappRadar data, on Aug. 4, the number of BNB Chain network addresses interacting with decentralized applications gained 17% on average. The only negative change was SecondLive, a metaverse using decentralized finance and NFT technologies.

Increased DApps use is not backed by additional addresses

Growing interest in BNB Chain DApps was not reflected in active network addresses, which peaked at 2.27 million on Dec. 1, 2021, and has recently averaged slightly over 900,000.

*Active BNB smart chain addresses. Source: BSCScan*

Even though BNB Chain’s TVL has been hit hardest compared to similar smart contract platforms, there is solid network usage in decentralized finance (DeFi) applications and games. Both Era7: Game of Truth and MOBOX: NFT Farmer rank in the top 10 DApps across every blockchain covered by DappRadar.

The above data suggest that BNB Chain’s TVL is losing ground versus competing chains, but investors should not be concerned because DApps activity in the network remains strong. As long as the Binance exchange does not face severe impediments in supporting the BNB Chain, there is little reason to be bearish on the BNB token.