On September 3, leading exchange Binance delved deeper into the decentralized finance (DeFi) space with a new automated market maker (AMM) pool.
The DeFi liquidity pool, dubbed “Binance Liquid Swap,” will enable liquidity providers to earn interest on their token holdings and cut down on transaction fees. Therefore, this innovative product will directly rival DeFi protocol Uniswap and its clones.
According to Binance’ ‘s official blog, the feature will offer more stable prices and lower fees for the pool.
“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,” the exchange’s CEO Changpeng (CZ) Zhao explained.
Consequently, traders wishing to provide utility and earn interest can initially deposit USDT/BUSD, BUSD/DAI, and USDT/DAI pairs. Besides, the AMM pool will accrue rewards earned with a corresponding 7-day Annual Percentage Return (APY); and then convert them into digital assets in the individual pools.
Binance Moves to Embrace DeFi Ventures
Binance is ramping up its ambitions to integrate decentralized products into its mainnet; that is, by launching two separate DeFi-related ventures in a week.
The world’s top exchange rolled out the “Binance Smart Chain” optimized for DeFi, two days before the DeFi liquidity swap’s launch.
Smart contracts support the chain, making it compatible with the ETH blockchain and interoperable with the Binance chain.
Binance asserts that their new chain will help foster the development of DeFi products. It offers low transaction fees (about 1 cent) and high transaction speeds.
A tweet from Binance aired that numerous DeFi protocols on ETH are working to develop new products on the new Smart Chain. Some include , including Aave, dForce, and SwipeWallet.
Binance Liquid Swap To Attract More Volume
Binance’s new DeFi protocol is the pioneering AMM pool attached to a centralized exchange. The DeFi liquidity swap aims to attract more volume and users to the trading platform by enabling users to pool tokens in their wallets.
The move could help the centralized exchange compete with Uniswap. Currently, it is the world’s most popular decentralized exchange protocol with over $ 1.8 billion locked in its pools.
As it endeavors to offer more lucrative products to its users, Binance also emphasizes crypto trading platforms’ safety. Recently, Binance partnered with privacy-centric cloud computing developers Oasis Labs. Likewise, it will develop a decentralized platform for combating crypto-related crimes.
The fraud detection feature launched on August 28 will tap into Oasis Labs’ confidential smart contracts to share threat intelligence data among various exchanges.