PancakeSwap "challenged" Uniswap by refunding 8 million USD in interface fees

PancakeSwap is willing to pay up to 8 million USD in interface fees for Uniswap users who have had to pay high fees on rival platforms.

On the evening of May 16, 2024, the leading DEX on the BNB Chain ecosystem, PancakeSwap, announced a plan to pay for the interface fee of up to 8 million USD that traders had to pay on the rival platform Uniswap. (UNI).

Accordingly, starting from 19:00 on May 16 - 06:59 on August 15, 2024, users with token swap orders on Uniswap v3 will receive a full refund of the interface fee.

It can be said that PancakeSwap's interface fee refund program is no different from a public "challenge" to their competitors, after Uniswap Labs increased interface fees from 0.15% to 0.25% for most pairs. swap transaction in mid-April, amid news that founder Hayden Adams faced the possibility of being sued by the SEC.

Uniswap's interface fee is the fee that traders must pay to perform certain token swap transactions (except for some stablecoin and wrap token pairs) when using the protocol's wallet interface and web application. Users can avoid paying this fee by accessing a different interface than the one developed by Uniswap Labs.

DEX starts a 0.15% interface fee policy from October 17, 2023 to expand revenue. At that time, it is estimated that the new fee will generate about 1 million USD per day, according to Flipside. Before the interface fee was applied, users only needed to pay the protocol fee, which is currently managed by the DAO.

To receive refunds from PancakeSwap, crypto traders must meet the following conditions:

1. Check the wallet address is eligible to participate in PancakeSwap's rebate program by accessing the protocol's Dune dashboard.

2. Have transactions on the Uniswap interface between 07:00 am on January 1 - 06:59 am on March 31, 2024, with a minimum cumulative volume of 5,000 USD in wrapped Bitcoin (WBTC) pairs ) and/or wrapped Ether (WETH) (such as WBTC/USDT, WETH/USDC, WETH/WETH, PEPE/WETH, etc.) on the Ethereum chain.

3. Executing a new swap order on PancakeSwap v3 with pairs of WBTC or WETH on the Ethereum network, with a volume equivalent to the order on Uniswap v3 in the past, will be fully refunded by PancakeSwap for the Uniswap interface fee.

For example, if you traded a cumulative volume of 1,000,000 USD on the Uniswap UI between January 1 - March 31, 2024, with WBTC and/or WETH pairs on the Ethereum chain and Pay the interface fee of 1500 USD, then when trading the same volume at a 1:1 ratio (1,000,000 USD) on Ethereum PancakeSwap v3 with WBTC/WETH pairs during the promotion period, a full refund will be given. Uniswap interface fee 1500 USD.

4. Must use the same wallet address for transactions on both Uniswap and PancakeSwap to be eligible to participate in the campaign.

5. If all the above criteria are met, the user must fill out a form to receive a refund.

PancakeSwap's interface fee program marks its latest attempt to gain market share from competitor Uniswap. PancakeSwap is currently the 6th largest DEX by daily trading volume, trailing Uniswap V3 volume on Ethereum by a gap of more than $700 million, according to CoinGecko data.

Previously, PancakeSwap planned to launch v4 version in Q3/2024 with four features that can increase transaction speed and optimize costs.

Sharing with CoinDesk, the leading DEX on the BNB Chain ecosystem, PancakeSwap, is expected to release the 4th version (V4) in Q3/2024 to increase efficiency in speed and transaction costs for users and users. including developers on the protocol.

The team notes that PancakeSwap V4 will bring a lot of technical improvements and features. Chef Mochi development team leader said:

“The source code of PancakeSwap V4 will be released under an open source license. This version addresses the limitations of current AMMs, including inflexibility in pricing models for all assets, lack of centralized exchange (CEX)-level order matching functions, Temporary loss for liquidity providers and expensive on-chain gas fees for users.”

It is expected that PancakeSwap V4 will be deployed on Ethereum and BNB Chain in Q3/2024, adding four new features including:

Hooks: These are externally deployed contracts that allow developers to add custom widgets. It can be understood as a set of tools that allows customizing transaction fees, trading order types (Limit or Market orders) or how to interact with the pool.

Custom pool: Offers various types of liquidity pools and aims to provide better prices for listed assets to users, helping to minimize sharp token price arbitrage during times of market volatility.

Singleton: Pool all pools into a single smart contract to reduce deployment costs by up to 99%. Gas fees, or the fees paid for each blockchain transfer, are further reduced for swaps because there is no need to transfer tokens between separate contracts.

Flash accounting: Gas fees often tend to increase during times of strong market fluctuations, limiting users' ability to transact. This feature combined with Singleton will help minimize gas fees by paying a series of transactions at once.

Launched in 2020, PancakeSwap is currently the decentralized trading platform with the third largest volume and market share in the market, only behind Uniswap and Curve DEX. Over the past year or so, PancakeSwap has significantly reformed the tokenomics model, not only in terms of issuance volume but also development strategy.

From improving the CAKE v2.5 tokenomics model, implementing the veCAKE model, launching the gaming marketplace and deploying additional integrated products on many networks of Base, Linea, Arbitrum One, zkSync Era. This DEX even shares transaction fee revenue with users holding CAKE. The launch of the 4th version comes just 1 year after the success of PancakeSwap v3.

According to data from DefiLlama, this DEX currently has a total value locked (TVL) of nearly 2.4 billion USD, an increase of about 70% compared to 1.4 billion USD in December 2023, recording trading volume derivatives amounted to $855.6 million in the latest 24 hours.