After the successful launch of Market Maker Integration on Ethereum, PancakeSwap have been listening to your feedback and are pleased to announce that they are “extending this feature to BNB Smart Chain.”
You can now trade BNB and ETH “with reduced slippage and the best possible pricing on the BNB Smart Chain.”
Liquidity is crucial to the success of decentralized exchanges (DEX) as it “ensures that there are enough assets for traders to execute their orders without experiencing significant slippage in price.”
Hence, Market Maker Integration plays a key role in “providing an additional source of liquidity to PancakeSwap by constantly offering to buy and sell assets at certain prices which reduces price volatility and enhances the liquidity, pricing, and overall trading experience for traders.”
Additionally, PancakeSwap will “not charge any trading fees for the BNB Smart Chain Market Maker Integration, providing users with the lowest trading fees on the platform.”
As a result, users can now trade on PancakeSwap “at the most affordable prices, enhancing the platform’s appeal and competitiveness.”
Here’s how Market Maker integration works:
- Enter the token amount you want to trade on BNB Smart Chain PancakeSwap on the usual Swap page.
- PancakeSwap will send requests to the Market Maker(s) (MM) for the latest quotes.
- PancakeSwap will automatically compare prices quoted by the Market Maker(s) and the Automated Market Maker (AMM).
- The route with the better price, (MM or AMM) will be sent back to the user.
- The user will be prompted to confirm the trade. Quotes will be refreshed every 5 seconds.
- Once the user confirms the final quote, a quote is sent through the wallet to sign the transaction to the smart contract for execution.
- Smart contract sends the swapped tokens from MM or AMM pool to users and sends the user’s token to MM or AMM.
Please note that during market-sensitive events, “such as significant economic announcements, MM may temporarily halt quoting, while the AMM will continue to facilitate trades.”
It is recommended “to check back and resume trading after these events have concluded if you want to trade with MMs.”
On PancakeSwap, there are distinct responsibilities “for market makers and liquidity providers. Liquidity providers contribute assets to the liquidity pool and receive rewards proportional to the trading fees generated.”
On the other hand, market makers are essential “to sustaining liquidity and reducing trading expenses.”
Liquidity providers are “the foundation of PancakeSwap and will continue to earn 0.17% trading fee rewards and yield on CAKE farms.”
Market makers will “not receive any CAKE rewards for providing liquidity.”
For more details on this update, check here.