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By Tony Zhu
The DeFi ecosystem is constantly evolving. With the recent launch of PancakeSwap V3 on the BNB Chain (BNB Chain) and Ethereum networks, new opportunities arise for traders, searchers, liquidity providers, and market makers.
A recent report by EigenPhi’s research team has found that BNB Chain offers unique arbitrage opportunities for traders and searchers, with arbitrageurs extracting over $40 million from the BNB chain during nine months from July 1st, 2022, to March 26th, 2023. Moreover, creating an arbitrage bot on the BNB Chain is ten times less expensive than on Ethereum, making it a more cost-effective option for traders and searchers.
With the launch of PancakeSwap V3, liquidity providers can efficiently manage their liquidity with the concentrated liquidity feature. This feature will allow liquidity providers and users to manage liquidity more efficiently, and it has already attracted traditional market makers to the DeFi space. In addition, the lower cost of adjusting liquidity on PancakeSwap V3 on BNB Chain may create more opportunities for market makers to adjust their liquidity more frequently and efficiently, leading to increased profits.
The similarity in the AMM design between PancakeSwap on BNB Chain and Uniswap on Ethereum makes it easy for arbitrage seekers who currently operate between Uni-V2 and Uni-V3 to seamlessly transition to PancakeSwap once V3 is live without requiring significant changes to their existing strategies.
PancakeSwap V3 offers new opportunities for traders, searchers, liquidity providers, and market makers on the BNB Chain and Ethereum networks. With significant liquidity fluctuations expected in PancakeSwap pools following the launch of V3, traders and searchers will have even more opportunities to capitalize on arbitrage.
Author Bio
Tony is a staff member at EigenPhi.com. EigenPhi provides the best analytical tools detailing MEV and liquidity on-chain data, as well as bespoke research to allow analysts, institutions, traders, protocols, and any DeFi stakeholders to accurately see the on-chain behaviors, structures, and networks leading to arbitrage, sandwich attacks, malicious tokens and liquidations impacting their interests.
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