Just weeks after announcing the rollout of new features to strengthen Pi Network’s position in the DeFi sector, the team has revealed additional insights into the workings of their decentralized exchange (DEX) and automated market maker (AMM).

Both innovations are currently in testing phases on the Pi Testnet and have been described as among the team’s most significant updates yet.

Pi’s DEX and AMM

The forthcoming decentralized exchange will enable users to trade tokens directly on the blockchain, eliminating intermediaries. It will function similarly to existing DeFi platforms like Uniswap and PancakeSwap, utilizing on-chain mechanisms such as order books and liquidity pools for optimal peer-to-peer trading transparency.

The Pi Network Core Team has stated this is an essential advancement for the project’s developing ecosystem, which is continually enhancing its foundational financial infrastructure ahead of the full migration to the mainnet.

Central to the DEX is the Pi automated market maker (AMM), which dynamically adjusts token prices based on supply and demand within each liquidity pool. An algorithmic model is used to establish value, facilitating instant swaps and guaranteeing users can trade without delays tied to traditional order matching processes.

The Pi Wallet will serve as a central hub for all DeFi operations. Pioneers will gain access to four key features from the wallet: swap, exchange, liquidity pools, and token management. The new update also incorporates liquidity provision, allowing participants to deposit tokens in liquidity pools to bolster trading pairs while earning a 0.3% fee on every trade within those pools. Users can withdraw liquidity whenever they choose, with the withdrawal amount based on the pool’s current token ratio.

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Growing Beyond

The team has expressed that the primary aim for the new DeFi products is to extend beyond their initial focus on education and innovation. By introducing advanced DeFi concepts within a secure testnet framework, the project intends to help its large user community safely navigate DeFi prior to the open mainnet launch.

If all progresses smoothly, the Pi DEX and AMM could serve as the foundation of the entire Pi Network financial ecosystem, evolving it from merely a social mining initiative into a sustainable decentralized economy crafted by and for its global Pioneer community. The video concluded.