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PancakeSwap Introduced Smart Router For Betterment of StableSwaps

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  • An anonymous developer developed PancakeSwap in September 2020. 
  • PancakeSwap has approximately 1 million active users. 

PancakeSwap is an automated market maker and a decentralized finance(DeFi) application that authorises users to exchange tokens providing liquidity via farming and earning expenses in return. 

PancakeSwap is a Decentralized Exchange (DEX) with the second-largest volume after Uniswap. The primary function of CAKE is to incentivize liquidity provision for the PancakeSwap platform.

Recently PancakeSwap has launched a new Smart Router algorithm service to make stablecoins trade more efficient with improved liquidity and pricing. 

On Medium Chef, Berries explained smart routers and their use cases on Pancakes Wap. 

The PancakeSwap community noted that “we have decided not to remove all incentives from the farm, but to reduce it to a lower multiplier of 0.1x to better match the current trading volume and vesting schedule of the token.” 

What is a Smart Router, and Why are They Important?

The newly introduced feature of PancakeSwap’s Smart Router’ is defined as a routing algorithm that links up the AMM and StableSwap to provide better liquidity and pricing. 

Smart Router operates a smart order routing algorithm that performs trades across multiple pools to find the best price for traders. This will reduce Slippage and find the most well-ordered trades. The Kitchen will slowly introduce StableSwap pairs to test and enhance the product.

  • You can Swap your Stablecoins with tokens with similar asset prices more easily with the same trade steps.  
  • The features lower the chances of Slippage in comparison to normal AMM.  
  • The transaction fees or trading fees are slightly lower than normal AMM. 

It is also noted that “Users who enable this feature will be able to enjoy the best possible price when trading through StableSwap.” 

The main aim of introducing this feature is to make trading and other operations easy and user-friendly, and the protocol aims to ease usage. 

Nancy J. Allen

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