PancakeSwap’s product lead emphasizes the necessity for improved capital efficiency in DEX adoption.

PancakeSwap, a decentralized exchange (DEX), believes that decentralized finance (DeFi) needs to improve its capital efficiency in order to increase the market share of DEXs. Chef Momo, the pseudonymous product manager of PancakeSwap, stated that the introduction of concentrated liquidity automated market maker (CLAMM) options trading on Arbitrum will bring a new approach to building on-chain liquidity in DeFi. The CLAMM options are now available for trading pairs such as ARB/USDC, ETH/USDC, and wBTC/USDC. Chef Momo explained that liquidity providers can use their existing liquidity in v3 pools on PancakeSwap to write options and earn premiums, ultimately boosting their overall returns. Currently, PancakeSwap is the 10th-largest DEX, with a market share of 3.37% on PancakeSwap V2 and 2.92% on PancakeSwap v3. Chef Momo believes that initiatives like CLAMM, which promote capital efficiency and composability in DeFi, will play a crucial role in growing the market share of DEXs. Currently, DEXs are overshadowed by centralized exchanges, with Binance boasting a daily trading volume of $26.4 billion compared to Uniswap’s $1.44 billion. However, Chef Momo remains optimistic about the potential for DEXs to gain more traction in the market with the right improvements in capital efficiency.