PancakeSwapV3 is a decentralized exchange (DEX) and automated market maker (AMM) on the Binance Smart Chain (BSC). It was launched in May 2021 and is an upgrade of PancakeSwapV2. The platform allows users to swap, farm, and stake cryptocurrencies. It was founded by an anonymous team, and its name is inspired by the popular pancake-themed branding on the Binance Smart Chain.
PanCakeSwapV3 offers several benefits compared to its direct competitors in the decentralized exchange (DEX) space. One key advantage is its efficient and secure trading experience. PanCakeSwapV3 is built on the Binance Smart Chain (BSC), which enables faster transaction confirmations and lower fees compared to its closest competitor, Uniswap, which operates on the Ethereum network. This makes PanCakeSwapV3 an appealing choice for users looking for cost-effective trading options.
Another advantage of PanCakeSwapV3 is its unique feature called Concentrated Liquidity, which allows liquidity providers to have more control over their positions. This feature enables LPs to set custom price ranges within which their funds will be utilized, resulting in capital efficiency and potentially higher returns.
Furthermore, PanCakeSwapV3 incorporates advanced features such as non-fungible tokens (NFTs) and decentralized finance (DeFi) lending protocols. These additional functionalities provide users with a wider range of opportunities to participate in the growing DeFi ecosystem and potentially earn more rewards.
Overall, PanCakeSwapV3 stands out with its lower fees, faster transactions, and innovative features compared to its direct competitors. Its efficient trading experience and integration with the Binance Smart Chain make it an attractive option for users seeking cost-effective and diverse DeFi solutions. However, it's important to evaluate different DEXs based on individual needs and preferences before making any investment or trading decisions.
PanCakeSwapV3 is a decentralized exchange (DEX) built on the Binance Smart Chain (BSC). It leverages the automated market maker (AMM) model to facilitate peer-to-peer trading of cryptocurrencies.
At the core of PanCakeSwapV3 is the concept of liquidity pools, which are pools of tokens locked into smart contracts. These pools enable seamless swapping between different tokens without the need for intermediaries.
To provide liquidity, users can deposit their tokens into these pools and earn trading fees in return. The protocol utilizes a unique algorithm, known as the Constant Mean Market Maker (CMMM), to maintain a stable and efficient pricing mechanism.
PanCakeSwapV3 employs a tiered fee structure, where users holding the platform's native token, CAKE, can benefit from reduced fees and other incentives. This tokenomics model aims to incentivize CAKE holders to actively participate in the protocol and contribute to its growth.
One crucial feature of PanCakeSwapV3 is the ability to create and customize trading pairs. Liquidity providers can create their own pool with any two tokens of their choice, allowing for increased flexibility and the support of less common tokens.
With its integration on the Binance Smart Chain, PanCakeSwapV3 benefits from the scalability and low transaction fees offered by this blockchain. Users can access the platform using a compatible wallet, such as MetaMask or Trust Wallet, and engage in decentralized trading with ease.
Overall, PanCakeSwapV3 offers a seamless and user-friendly experience for decentralized trading, powered by its liquidity pools and the Binance Smart Chain.
DIA follows a comprehensive approach to fetch trade data from various DeFi and NFT exchanges. The process differs depending on the type of exchange in question.
For centralized exchanges like Coinbase, Kraken, and Binance, DIA utilizes scrapers that directly collect trades from exchange databases using Rest APIs or WebSocket APIs. These scrapers retrieve trading data at varying frequencies, ranging from 1 to 7 seconds, depending on the exchange. By collecting data as close to the source as possible, DIA ensures high precision and up-to-date information.
In the case of decentralized exchanges, DIA collects trade data from different blockchains by subscribing to swap events in liquidity pools. This approach allows DIA to retrieve trading data directly from the blockchain itself, enhancing data accuracy. Notable decentralized exchange sources include Uniswap, curve.finance, and PancakeSwap. By sourcing data from the blockchain, DIA can provide reliable and verifiable trade information.
When it comes to NFT marketplaces, DIA captures live trading data from integrated marketplaces' smart contracts. The retrieval period for NFT transactions typically ranges from 20 seconds to 1 minute, ensuring real-time and accurate data. By focusing on the broader NFT market and excluding unreliable bids and offer data, DIA ensures precision and reliability in their price feeds for NFTs. Integrated NFT exchange sources include Blur, X2Y2, OpenSea, and TofuNFT.
Overall, DIA's data management strategy encompasses granular trade data collection from various exchanges, both centralized and decentralized, as well as NFT marketplaces. This approach allows DIA to provide highly accurate and customizable price feeds for cryptocurrencies, NFTs, and other assets.
For DeFi exchanges like PancakeSwap V3, DIA follows a two-step process to compute trade data and build price feed oracles.
Step 1: Data cleaning and outlier detection: To ensure the accuracy of the price estimation process, DIA performs data cleaning and removes outliers. This step eliminates trades with prices that deviate significantly from the current market price. It helps prevent market manipulation, errors, and flash crashes from impacting the price data used for the feed. DIA applies an Interquartile Range (IR) filter to exclude data points and sets that lie outside an acceptable range relative to the interquartile range. This filter analyzes trades within a predefined time range, sorts them by recorded price, divides the price range into quartiles, and removes trades falling into the first and last quartiles.
Step 2: Price determination methodology application: DIA calculates various trade-based price determination methodologies to retrieve a single USD price value for each asset. These methodologies are applied to individual assets on each exchange and for all assets combined. One example is the Volume Weighted Average Price (VWAP), which considers the different volumes of trades. Trades from the queried time range are collected and weighted by volume to calculate the average price. Another example is the Moving Average with Interquartile Range Filter (MAIR), where trades are ordered by timestamp, grouped into blocks, and weighted against volume for each data point to determine the final price.
For NFT collections, the process is different. DIA computes the floor price of an NFT collection through two steps: data cleansing and pricing methodology application.
Step 1: Data cleansing: The on-chain trade data for the NFT collection is processed to exclude outliers and manipulation techniques. This helps ensure market-representative prices by filtering out malicious behavior like wash trading and floor sweeping.
Step 2: Pricing methodology application: DIA offers different pricing methodologies for NFT collections. The simplest is the Floor Price, which provides the lowest recorded sale price within a given time window. However, it can be manipulated by malicious actors. DIA also provides the Moving Average of Floor Price, which returns the moving average of a collection's floor price. This methodology can be customized based on parameters such as the length of the average or the size of the floor window. DIA applies an interquartile range outlier detection filter to identify and filter out manipulative behavior.
In summary, DIA leverages data cleaning, outlier detection, and various pricing methodologies to compute trade data from PancakeSwapV3 and build accurate price feed oracles for both DeFi and NFT exchanges.
Instead of distributing pre-calculated data feeds, DIA covers the whole data journey from individual trade collection, and computation to the last mile of the feed delivery.