Cryptocurrency exchange Binance has introduced an automated market maker (AMM) called Binance Liquid Swap for the development of the Decentralized Finance (DeFi) industry.
Binance Liquid Swap will be integrated with Binance and will be the first AMM to operate on a centralized marketplace. Binance Liquid Swap is a multiple liquidity pool with the ability to swap digital assets instantly. Thanks to this market maker, liquidity providers will be able to earn a percentage of the provided tokens.
After the launch of Binance Liquid Swap, the following trading pairs will be available: USDT / BUSD, BUSD / DAI, and USDT / DAI. Interest will accrue on the assets of the respective pool. The rate and amount of transaction fees will depend on the number of assets in the liquidity pools.
Instead of a regular order book, AMM will use a dedicated pricing module to provide more stable rates and lower transaction fees. From September 4 to October 4, trading commissions will be 0.04%, and after this period will rise to 0.1%.
“We intend to contribute to the development of the decentralized finance market, as DeFi products are gaining more and more attention from the crypto industry. Our centralized Binance Liquid Swap pool will provide liquidity with the required level of security, ”said Binance CEO Changpeng Zhao.
Binance developers launched yet another solution targeting the DeFi industry this week. This is the Binance Smart Chain, which is the Binance Chain sidechain to support smart contracts. The solution enables internal BNB token staking and DeFi app development.
However, not everyone is confident in the optimistic future of decentralized finance projects. A few days ago, Vitalik Buterin compared this industry to the “printing press” of the US Federal Reserve System (FRS), saying that the constant emission of DeFi tokens carries great risks for their holders. In addition, Jay Hao, CEO of OKEx, advises to take into account that sooner or later the popularity of DeFi projects will decline, and many may lose their investment.