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Now that organizations in the DeFi sector have pretty well understood the zooming pace of its growth, many entities are innovating and expanding their branches like never before. The world’s largest crypto exchange in terms of daily trading volume is getting deeper and deeper into this world. It is now reinventing its offerings with more and more DeFi style products and one of its latest is called Binance Liquid Swap, an automated market maker.
Its latest offering has been positioned to take on Uniswap and its clones. Binance has planned to launch an AMM liquidity pool which will allow its users to provide liquidity by depositing tokens. On the lines of how the world’s largest DeX allows its users to earn, Binance Liquid swap will also let users earn interest apart from earning a cut of the trading fees for the pool.
Binance Liquid swap is the first AMM pool product on any centralized exchange that will be integrated into the exchange. It will let users pool tokens in their wallets and earn rewards from it. The AMM will also use a pricing module instead of the conventional order book so that the pricing is at a more stable level. Users can rapidly execute an exchange between two tokens present in the Swap pool, or instead, become a liquidity provider by adding more funds to the pool and earn fees from the trades. The initial assets that will be available to be traded in the Swap pool will be BUSD, DAI, USDT with BUSD/USDT, BUSD/DAI, and USDT/DAI as the pairs available at launch.
Users can add funds to the liquidity pool to get returns such as trading fees and also savings interest. Trading in the pool means better pricing and a low slippage depending on the size of the pool. Competitive During the promotion period all trades will enjoy a very low fee of 0.04%. Trading fees will return to 0.1% after the promotion ends on 2020/10/04.
The earnings will be collated with a parallel 7-day annual percentage yield (APY). the returns will be converted into assets in the designated pools.
Binance CEO, Changpeng Zhao,is clear that the new product launched will increase adoption as well as volumes that are very crucial at this juncture.
“We hope to further the growth of the DeFi marketplace and empower our users with more earning power and easier liquidity through a centralized AMM pool with the credibility, safety and security provided by Binance,”
Within a week, this is Binance’s second roll out in the DeFi space, the first being Binance Smart Chain, a smart chain contract compatible blockchain that is interoperable with the existing chain. Binance said that the blockchain was constructed and optimized for DeFi and boasts of low transaction fees, going as low as 1 cent. Not just that, it is also capable of producing a block once every three seconds.