Binance once again proved that it would not sit and stare as the Defi world is on the boom. In its most recent announcement, the crypto exchange revealed its plans of launching Binance Liquid Swap, an automated market maker (AMM).
This new offering rivals the services of Uniswap, along with its clones. As explained, Binance Liquid Swap will enable token depositors to provide liquidity. Apart from the users’ share from the pool’s trading fees, the company will also allow users to acquire additional interest, just like how it works on decentralized exchanges.
Notably, the team behind Binance’s DeFi-inspired products will integrate them into the crypto exchange platform, making the AMM project the first of its kind on a decentralized exchange. By doing so, users will be able to pool their tokens and earn rewards.
However, to provide price stability and lower transaction fees, Binance Liquid Swap will rely on a pricing module and not on an order book. Binance will, of course, prioritize liquidity for its native tokens, giving users the following option: USDT/BUSD, USDT/DAI, and BUSD/DAI.
A user’s earning will be amassed with a 7-day (annual percentage yield). The returns will notably be converted into the assets present in the corresponding pools. Meanwhile, the number of assets in specific liquidity pools will be used to determine prices and transaction fees.
Changpeng Zhao or CZ, the CEO of Binance, said that the new offering’s goal is to encourage more participants that will ultimately boost their operation’s volume.