PancakeSwap CLMM: How ReHold Generates 220% APR Through PancakeSwap

The emergence of decentralized finance (DeFi) has given birth to many innovative blockchain technologies, with the ReHold protocol contributing immensely to the growth of the DeFi space as it has provided a new perspective to staking and earning rewards in the DeFi space.

Decentralized finance and the creation of decentralized exchanges (DEX) has caused so much offset for major traditional finance system as this makes it possible for many aspects of DeFi to be explored, such as yield farming, lending and borrowing, flash loans, and the generating high yield APR up to 220% without an intermediary like traditional banks or financial system that has put out policies that makes accessibility to these aspects of finance difficult.

Smart contracts have made the automation of decentralized exchanges seamless, making trading pairs easy to access and opportunities to earn more by interacting with DeFi protocols.

PancakeSwap is one of the leading concentrated liquidity market makers DEX built on the Binance Smart Chain (BSC), which has been automated with smart contracts with the highest volume on the BSC network. One of the key advantages PancakeSwap has over other DEX on the Ethereum network is its low transaction fees, fast transactions, decentralized, and highly secure.

This article focuses on ReHold protocol, PancakeSwap benefits, PancakeSwap integration with ReHold on the BNB Chain, ReHold CLMM and high APR strategies, and benefits and risks of using CLMM on ReHold for staking.

Understanding Decentralized Exchange (DEX) and PancakeSwap

Decentralized exchange (DEX) is a peer-to-peer marketplace built with smart contracts to enable users to exchange token pairs or buy and sell cryptocurrency tokens without needing a third party to facilitate the transaction.

Decentralized exchange replaces third parties with smart contracts to enable the automation of crypto assets to be tradable with ease through the availability of liquidity.

Compared to most traditional finance systems that have become rigid with their policies, making their services difficult to access and explore, DEXs offer a more transparent and robust system where transactions and interaction with different DeFi services are open-sourced.

Decentralized exchanges have become a big player in liquidity provision to the DeFi space and crypto industry as a whole; DEXs enable users to have full control of assets, eliminate third-party charges and policies and enable users to access different services to generate high APR in the DeFi space.

Decentralized exchanges over the years have been built on different models, such as automated market makers and order book DEXs. The Automated market maker (AMM) has gained much attention with Uniswap but has seen much improvement in early times with many DEXs adopting the use of the concentrated liquidity market maker (CLMM) mode because of its benefits such as concentrated liquidity, capital efficiency, and management of impermanent loss and slippage.

Earlier versions of DEXs adopted the AMM model but suffered many setbacks in risk mitigation strategies, impermanent losses, and high slippages in a bid to front-run transactions. Many of the DEXs, such as PancakeSwap, adopt a concentrated liquidity model which offers the following benefits:

1. Liquidity providers: The CLMM model provides liquidity providers with better opportunities to deposit funds in specific price ranges and earn more as they adjust prices in liquidity pools. This will also help LPs to have individualized price curves for better capital efficiency and portfolio allocation.
2. For Traders: Traders will enjoy more deep liquidity with lower slippages at faster token swaps.
3. For Projects: With better liquidity in pools, projects like ReHold integrate easier with PancakeSwap for better usability and token trading.

Concentrated Liquidity Market Maker Explained - Benefits and Risks of Using CLMM

Concentrated liquidity market maker (CLMM) is a new model of an Automated market maker (AMM) designed by a smart contract algorithm for decentralized exchanges to enable liquidity providers (LPs) to add liquidity to token pairs within specific price ranges.

This model was initially thought to be complex conceptually in the crypto space but possible as it allows liquidity providers to provide liquidity to liquidity pools with better strategy within a certain range as the managed capital more efficiently, diversifying assets into different pools instead of providing liquidity to a wide range of price.

Managing CLMM positions by liquidity providers can be stressful as it requires LPs to be active participants to adjust their price ranges for eligibility to trading fees as rewards.

The ReHold and PancakeSwap Integration

The ReHold protocol is a smart contract algorithm that leverages concentrated liquidity DEXs such as Uniswap V3, QuickSwap, PancakeSwap, and others to enable users to create short trades within 12 to 24 hours using its dual investment strategy to earn higher APR of up to 220%.

The protocol generates earnings by providing liquidity in PancakeSwap liquidity pools (LPs) through concentrated liquidity. The protocol places user assets within a specific price range of the pool curve, collects all fees paid by traders operating within that range on PancakeSwap, and returns user assets and their yields to the users.

Such efficient utilization of concentrated liquidity on PancakeSwap is possible due to the unique ReHold algorithm. This algorithm can accurately identify the optimal range to yield the highest returns.

ReHold protocol architecture has been designed to integrate easily with other decentralized exchanges like PancakeSwap to provide better earning services and high APR through the following ways:

1. Efficient Gas Fees: ReHold protocol integrates with PancakeSwap on the BSC network to enable low gas fees; this has proven to be a hot topic in the Ethereum network as it has been known for its excessive gas fees when the network faces much traffic as a result of demand.
2. New Token Listing: ReHold integrating with PancakeSwap on the BSC network makes token listing and trading on the ReHold platform seamless. This is increasing staking duals on ReHold and making liquidity readily available in the DeFi space.

Trading on DEX platforms exposes traders and investors to price impacts and volatility associated with the crypto market. ReHold has adopted these strategies to help beginner and pro users mitigate the risk of trading on DEX platforms.

Beginner:

1. If you speculate the price goes up, then create a Dual Investment with stablecoins USDT, USDC, or BUSD as an entry ticker.
2. If you speculate prices to go down, create a Dual Investment with crypto BTC, ETH, and BNB as an entry ticker.
3. In a ranging market, your entry ticker doesn't matter, you will still earn.

Pro:

1. Create a Dual Investment with stables to obtain discounted cryptocurrency (ETH or BTC) or to increase your stablecoin if you want to buy cryptocurrency at market pricing.
2. Creating a dual investment with cryptocurrency (ETH/BTC) will allow you to sell it for more money or grow your holdings if you want to sell it for a higher price.

Conclusion

Many DEXs, including PancakeSwap, have adopted concentrated liquidity models as it provides better capital efficiency, deep liquidity, and high earning potential for liquidity providers.

PancakeSwap CLMM strategy provides an opportunity for ReHold protocol to integrate its architecture provides the following opportunities to its user:

1. Lower transaction fees.
2. High APR return of up to 220%.
3. Possibilities of investing in a variety of tokens listed on PancakeSwap.