PancakeSwap v3 (Ethereum)

About PancakeSwap v3 (Ethereum)

PancakeSwap is an Automated Market Maker (AMM), and the Exchange is at the heart of PancakeSwap. PancakeSwap is the leading AMM on the BNB Smart Chain, and as statistics tell, the most popular Decentralized Exchange (DEX) ever!

What's new in Exchange V3?

• Concentrated liquidity - liquidity will be concentrated on the most actively traded price range, which means:

  • Lower trading slippage for traders

  • Potentially more LP fee rewards for liquidity providers

• A flexible trading fee structure - Liquidity providers can choose between multiple trading fee tiers when creating liquidity pairs or providing liquidity

• Customisable price range - Liquidity providers can also choose what price ranges they want to provide liquidity to

• Non-fungible liquidity positions - Each liquidity position will have its own unique ID corresponding to its configurations (such as price range). Therefore, you will be able to create and maintain multiple positions with the same trading pair but with different configurations and liquidity amount

• Backwards compatible - v3 Exchange will also utilise the legacy v2 and stable swap liquidity pairs to always provide the best trading route

• Built-in limit order - Pro users can utilise the new customisable price range in liquidity provisioning to effectively create a limit order which will convert all the tokens to the desired one when the price hits the target

Gas Fees

As such, the first thing is to make sure you have enough BNB to pay for the gas fee of the on-chain transactions. Typically, gas fee fluctuates depending on the number of transactions in the queue, if there are more transactions, a higher gas fee may be required to push through the transaction. On BNB Smart Chain, the gas fee typically ranges from cents to a dollar USD in BNB. 

Transaction Fees

If your swapping action still doesn't go through and it is displaying an error for you to revise the slippage -- you may want to check if the tokens you are trying to swap has any fees and restrictions on transactions.

It is not uncommon for tokens on BNB Smart Chain to include a transaction fee in their contracts, usually these fees could be used for burning, funding a treasury of a fair launch project -- for example, this APX token has an 1% tax on every transaction for sending to a burn address, such that more transactions would mean more burning, accruing value to APX token holders.

With the transaction fee, whether it is inclusive (a portion of the swap amount is sent elsewhere than your address so the output is less than expected for the estimated input) or exclusive (requiring an additional transfer from your address to send extra tokens so the input is more than expected for the estimated output), it affects the input and output amount that you agree for signing the transaction. In many cases, the transaction cannot meet the input and output requirements because of the tax.

Swapping with Transaction Fees

Before you swap any tokens, make sure you have visited their website to understand if they have a transaction fee mechanism (or tax as many projects put it). If there is, make sure you set a slippage that is sufficient to accommodate the transaction fee -- e.g. if there is a transaction fee of 5%, your slippage will have to be set at at least 5% plus the normal trading slippage depending on your trading amount and the token's liquidity, say 5.5%-6%.

In some extreme cases including some scams, some tokens even have a block on most or all transfers on chain, or only allowing certain addresses to sell, in such case it is impossible to swap the token successfully. Do learn about the token you are trying to swap and be aware of any fees and restrictions!