The Sweet Success: Unpacking PancakeSwap’s 90% Surge in a Week
PancakeSwap, the Binance Smart Chain (BSC)’s leading decentralized exchange (DEX), has seen a massive increase in price and trading volume this month. The platform’s CAKE token has increased by more than 90% in the first seven days of this month, reaching a high of $2.4 on November 6th after a long period of downfall. The DEX also reached a new high of $2 billion in daily volume. According to DeFiLlama, Pancake Swap’s total value locked (TVL) has also reached $1.4 billion, making it the second-largest DEX after Uniswap. So, what is driving this impressive growth for PancakeSwap? Let’s find out in this article.
One of the main reasons is the recent integration of a portfolio manager feature, which was announced on October 30th. After this announcement, trading volume increased by 42%, reaching $373 million in 24 hours. Market capitalization is $548 million at the time of writing, with a 25% increase in 24-hour volume. This feature, developed in partnership with Bril Finance, a DeFi protocol designed for optimizing liquidity provision, allows PancakeSwap users to deposit single assets into vaults through the exchange’s user interface. Once the tokens are deposited, they are automatically rebalanced by a liquidity provision algorithm.
New Tool – Position Manager
According to a blog post shared by the PancakeSwap team, Position Manager is a collaborative integration between PancakeSwap and elite protocol partners, offering a suite of strategies for optimal Liquidity Provision (LP) position management. This means that there will be no more manual LP configurations or complex calculations. Users can easily select trading pairs and preferred protocols, then execute their strategies using our simple Position Manager interface.
Auto-compounding LP rewards: Say goodbye to gas fee worries with auto-compounding LP rewards. Position Manager reinvests rewards from liquidity provisions (LP) automatically, utilizing the power of compound interest.
Automated LP without going out of range: Integrated protocols handle tasks such as creating and staking liquidity positions, rebalancing, and gathering rewards. They adjust price ranges, collect fees, and reinvest them to maximize returns and reduce temporary risk.
Seamless integration with top protocols and strategies: Collaboration with elite protocol partners to provide you with a wide range of strategies for most effective LP position management.
What’s the Need?
This tool helps PancakeSwap users in diversifying their investments across different liquidity pools in order to increase their returns while managing risk. Users can deposit assets such as USDT, BTC, BTCS, BNB, and Ether, and the portfolio manager will automatically distribute them across various pools. According to the PancakeSwap and Bril teams, this system will provide users with higher risk-adjusted returns than other methods. They also claim that the protocol has already produced over 24% internal rate of return (IRR) in tests.
The portfolio manager feature is beneficial not only to users, but also to CAKE token holders. For the first four weeks after the feature’s launch, users who deposit their assets into the vaults will receive additional CAKE rewards. This creates more demand and incentive for holding CAKE, as well as increasing its utility and value proposition.
The portfolio manager feature is not the only innovation that PancakeSwap has introduced recently. On November 2, the DEX also launched a new lottery system that allows users to buy tickets with CAKE and win prizes based on matching numbers. The lottery also burns 50% of the CAKE used to purchase tickets, reducing supply and increasing token scarcity.
Not only this, it has also entered into the Blockchain gaming domain by introducing the PancakeSwap Gaming Marketplace on November 15. According to the platform, it has engaged a peak of 25000 players on a daily basis. After the announcement, the price of CAKE touched to $2.7 the next day.
Moreover, PancakeSwap has also been expanding its ecosystem and forming partnerships with other projects and platforms. In September, for example, it added Transak as a vendor for making fiat to crypto payments, allowing users to buy crypto directly on the exchange using their local currency. It also collaborated with Chainlink to launch Chainlink Price Feeds on BSC in August, which improved security and reliability.
Future of PancakeSwap
PancakeSwap is clearly one of the most innovative and well-established DeFi DEXes, particularly on BSC. With its portfolio manager feature, lottery system, fiat gateway, price feeds, gaming marketplace and other features and functionalities, it offers a comprehensive and user-friendly platform for trading, investing, and earning crypto. As more users are attracted to PancakeSwap and more demand is created for CAKE, the DEX is expected to maintain its impressive growth and performance in the near future.