V3 Era of DeFi What's Changing Pancake Swap

We all know that biggest issue with DeFi right now are the constant large hacks that continue to happen. It seems like every month millions go missing from hacks and other exploits of which far little is ever returned. This is causing a lot of DeFi places to rethink how it works and start to innovate.

The biggest advancements seem to be happening with a new V3 while it feels like just yesterday we got V2.

I wrote a little about this already on a previous blog post here V3 Liquidity Pools Start

One of the newest additions to this movement is Pancake swap that uses their native token CAKE. Which personally I've been pretty heavy with only because it had a connection with CubDeFi

Now ever V3 of a defi platform is going to be unique as there's not standard as to what each version /site releases. In the case of CAKE there's an all new revenue sharing model being released.

In general by staking your CAKE tokens into the CAKE pool you still earn your normal APR on cake tokens however with this new update a revenue sharing pol will be added.

There are two options to pick from at the moment a fixed term contract in which you lock up your cake for a period of time which the longer you do the higher APR you'll be earning and a flexible which allows you to earn some APR on your staked cake but it's very limited.

For CAKE stakers 5% of the trading fee revenues from ALL PancakeSwap v3 pairs with a 0.01% and 0.05% fee.

Here's a breakdown chart from their website and announcement.

Every week you'll be able to go in and claim your fees for the CAKE you have locked up.

What we are seeing right now happening on Pancake swap is a huge amount of newly locked in CAKE tokens into these pools to try and collect the fees. So much so that a 5 week lock period is only paying roughly a 1.5% APR.

While this makes sense many are betting that the amount in fees generated should offset the loss in APR or at least make it worth it. This new phase really starts to stack in the process of sharing rewards and a sense of passive income generation on the platform.

For myself it will be interesting to see how this turns out in a week and what my rewards look like to give me a sense if this is going to be worth it or not. The other factory will be how much value will it end up brining to the CAKE token itself. It should be interesting to start earning some other tokens besides just more cake now on this defi platform and perhaps might be something in which other platforms will start to adopt.

Passive income streams like this can be extremely powerful and rewarding. It creates demand, investment and overall a sense of being a part of the platform and wanting it to do well and succeed.

You may even be more inclined to use the platform yourself knowing that you'll be earning a small fraction back and helping in the overall health of the defi platform.

What are your thoughts on Pancake swaps V3 updates? Positive or Negative let me know in the comments.

Posted Using LeoFinance Alpha