By Nathan Ferguson
On the Binance Smart Chain, PancakeSwap is a top-ranked DeFi protocol with some decent metrics. Gas fees are payable with BNB tokens, and the native CAKE token rewards users with the ability to vote, play the lottery and make predictions, among other things.
While opening the homepage of the website, I noticed a cute sleepy-eyed bunny to the left with a bottle pack behind it. The very first thing I noticed when I saw that image is that the web designers were most certainly trying to find ways to increase the number of women who signed up for their service. Pancake Swap’s design team has made an admirable effort that has the potential to make a real difference in the crypto world, especially considering the skewed male-female ratio. I think their efforts are commendable and are worthwhile. Now that we’ve seen some cute bunnies, I am ready to move on. Getting to the actual job at hand is the next step.
About PancakeSwap?
PancakeSwap is a DEX where traders can trade crypto without intermediaries. It utilizes the BSC blockchain and the BEP-20 standard for its blockchain. An alternative exchange to Ethereum is one based on the blockchain, where no one is tracking your transactions.
At PancakeSwap, market makers act as liquidity pools and traders compete against each other to get the best price. Trading on the platform is possible using BEP-20 tokens. Through PancakeSwap, users can add liquidity pools to the platform and use them to transact. In return, liquidity providers are compensated with liquidity providers. The liquidity providers are referred to as FLIPs by PanaceSwap. FLIPs can be used by traders for a variety of purposes, including:
- Refund part of the commission and return the share
- Tokens for the Farm CAKE. SYROP tokens can be obtained by traders using CAKE tokens. Besides serving as a control token, it doubles as a lottery ticket.
The general rule is that users who hold their tokens in the pool always get rewarded. One other terrific feature about PancakeSwap is that it is part of the ever-developing field of decentralized finance.
How does this DEX work?
The trade of tokens between token pairs is facilitated by liquidity pools between token pairs. Users can transfer tokens between each other directly, using no intermediaries whatsoever. Ticket holders who placed their tokens in liquidity pools split the transaction fees with token holders. PancakeSwap is an essential part of the site, but it’s a tiny part among a couple hundred other features.
In addition to placing coins in syrop pools, Pancakeswap DEX enables users to earn rewards. By leaving your CAKE (your token from PancakeSwap) in the “syrop” pool for a while, you will make even more CAKE.
You can automatically restock your rewards every hour with an automatic capitalization feature. Users will receive remunerations continuously through the capitalization feature.
Raffles and NFTs cards distinguish PankaceSwap from other exchanges. Platform users can wager whether Binance Coin’s (BNB) price will increase or decrease. Lottery participants could win up to 50% of the jackpot. Online games and collectibles are analogous to NFTs cards.
In addition to bunny-themed collectible tokens, Pancake Swap also offers a wide range of non-food tickets (NFTs).
Additionally, you can buy new coins from startup projects through initial token farm offerings (IFOs).
The PancakeSwap exchange
Market maker (AMM) is the principle behind PancakeSwap. You cannot trade digital assets on the platform since there is no order book, and liquidity pools provide a means of trading.
Other users’ funds are placed in those pools, and LP tokens are received as a reward for depositing them into the pool. A portion of the trade fee can also be recovered using those tokens and reclaiming a share.
As a result, you can trade BEP-20 tokens, add liquidity, or earn rewards. We’ll talk about additional features later on.
There are several ways to obtain these LP tokens – for example; if you add USD and BNB to the pool, you will receive USD-BNB LP tokens. Ether and BETH? LP tokens will be created.
Using PancakeSwap
The pancakeswap website will not allow you to access many features until you click Unlock Wallet. By clicking on it, you will get a couple of choices: Trust Wallet, MetaMask, Binance Chain Wallet, WalletConnect, and more. However, MetaMask is an Ethereum wallet, don’t you think? For more information about connecting MetaMask with Binance Smart Chain, please see our guide on connecting MetaMask with Binance Smart Chain. Once you’ve configured that, you can access more information in your wallet. The returns from the various LP tokens will differ. How can liquidity be added?
Adding liquidity
Those who have used AMM before will be familiar with the process. You will first need to make your exchange more liquid before you begin farming CAKE.
Navigate to the Trade section from the left sidebar, click on Liquidity, and then hit Add Liquidity. Next, choose the token pair to be deposited. Before adding liquidity to a pool, it is also essential to know of impermanent loss.
Farming and Staking Opportunities with PancakeSwap
Next, we will discuss the importance of PancakeSwap’s farming opportunity, as this could be another highlight of this token. In order to become a liquidity provider on the DEX, you are required to deposit your crypto assets in the liquidity pool. As a result, you can now invest your LP tokens into a project in return for native tickets such as cake, i.e., PancakeSwap CAKE, in return for rewards, return for your LP tokens.
In terms of the list of LP tokens that you can use to farm on the DEX, there are many pairs that you would have the option to choose from. One of the most frequently accessed listings in the database are CAKE-BNB LP, USDT-BUSD LP, and others. On PancakeSwap, you can also take advantage of other farming opportunities.
While you’re at it, check out the options for staking, and you’ll need PancakeSwap CAKE to do so. To stake on the famous Binance Smart Chain-based DEX, one must use the native BEP-20 token of the platform. In exchange for risking CAKE in a pool of SYRUP, you will receive SYRUP in a ratio of 1:1, and you will earn rewards as well. It is estimated that almost 25% of CAKE emissions are distributed proportionately across SYRUP holders.
You can stake PancakeSwap CAKE tokens after depositing money in order to obtain LP tokens. Being a part of various staking pools allows you to earn many other tokens. You can stake more CAKE tokens in one of the largest SYRUP pools for CAKE tokens, meaning you can make more SYRUP tokens.
How Can I Use PancakeSwap?
Without understanding the practical implications of the PancakeSwap coin and the underlying technology, a detailed discussion would not be complete. Despite what you see, DEX does not have a lot of functionality. Is it possible for PancakeSwap to compete with Uniswap if those features are unavailable?
Connect the Wallet
Wallet features need to be unlocked by clicking the “Unlock Wallet” option. Various wallet options are available to you, such as WalletConnect, MetaMask, Binance Chain Wallet, Trust Wallet, and many more. Despite being an Ethereum exchange, despite the fact that MetaMask is an Ethereum wallet, it is compatible with PancakeSwap.
Despite its status as an Ethereum wallet, MetaMask can interact with Binance Smart Chain-based dApps thanks to the architecture of the Binance Smart Chain. The new DeFi protocol and its fascinating features can be explored after connecting your wallet to PancakeSwap.
Contributing Liquidity
Individuals who have used AMM-based protocols would understand how to add liquidity to PancakeSwap. CAKE token farming on an exchange requires liquidity.
- On the left side of the page, you’ll find the option of “Trade,” where you can add liquidity to the exchange.
- Simply select the Liquidity button and then “Add Liquidity.” You will now have the option of “Liquidity.” Click on this button.
Before contributing liquidity to collections, be sure you understand the potential loss.
Farming
You are prepared to begin your farming business when you acquire the LP tokens through PancakeSwap. You might be able to earn CAKE as a reward by participating in staking on the exchange.
- Choose the option relevant to your LP tokens from the ‘Farms’ tab on the PancakeSwap app.
- BEP-20 tokens must also have their owners’ consent before being moved. You can find a popup asking you to confirm the transaction when clicking on “Approve Contract.” You can also see the fee details.
- As soon as your transaction has been confirmed, you need to select the amount you wish to stake and confirm your decision. The PancakeSwap CAKE earnings can be checked after a few minutes by moving away from the page and returning afterwards.
PancakeSwap DEX’s Harvest button allows users to instantly harvest their rewards since they only have to confirm a transaction after clicking the Harvest button.
Staking
One of the primary positive factors in PancakeSwap’s favour is the opportunity to farm on their platform. Staking in SYRUP pools is possible through the exchange, and PancakeSwap makes it easy to gamble on the business with a few simple steps.
- When you click the “Pools” tab, you will see the various pool options available for you to stake your CAKE tokens.
- By clicking on “Approve CAKE,” you will be able to provide your approval for the withdrawal of the tokens.
- There is also the option for the staker to choose the amount of PancakeSwap CAKE that he/she wants to stake.
- As a passive reward, you can earn CAKE tokens after staking them. If you click “Harvest,” all your rewards can be cashed out on the exchange.
Other Applications on PancakeSwap
DeFi’s new token farming and staking protocol is displayed in the discussions about PancakeSwap token farming. A decentralized exchange like this is not just another DeFi platform that lets you earn crypto fortunes by farming and stakes. As well to pancakeswap, there are many other interesting apps you can check out to boost your investment returns.
- Lottery
A highlight of PancakeSwap v2 would be its lottery features, which is perhaps the most striking feature. It is possible to enter the lottery and try your luck to win one of its exciting prizes. It is important to note that the lottery session could last anywhere from 6 to 8 hours and that you can participate with a ticket.
Ten CAKE tokens would be needed for one ticket, and five random numbers would be selected between 1 and 14. Lottery jackpots or winning prizes are 50 percent of the pool, and they should match the four winning numbers precisely in the same order on the ticket. There is also a chance of winning rewards if two or more numbers on your lottery ticket are the same as those on the winning ticket. The PancakeSwap exchange offers a unique approach to your crypto experience, isn’t it?
- NFTs
There are several other surprises at the DEX, including the chance to win special NFTs. You can win adorable NFTs by using PancakeSwap tokens on Binance Smart Chain, and CAKE tokens can be traded for NFT tokens or stored as collectibles.
Using the PancakeSwap app, you can win NFTs by signing up. I like the random selection process of NFT contests the best. Find out about the latest opportunities by visiting the NFT page on the exchange.
- IFOs, Teams, and Profiles
In addition to its many exciting features, PancakeSwap offers other exciting features which every beginner should know about. IFOs are a perfect example of this. Initial Farm Offerings are an exciting way to promote a newly launched token by leveraging the power of yield farming.
The exchange allows users to launch IFOs on the exchange with LP tokens committed from pools that support recently launched tokens. In addition to its Teams and Profiles features, PancakeSwap offers the ability to create a public profile to showcase your statistics.
Safety with PancakeSwap
Since PancakeSwap is a decentralized exchange, people will wonder, “Is PancakeSwap Safe?”. The third-party audit offered by CertiK is a significant advantage. While auditing and security are features provided by the exchange, they do not guarantee funds will be safe. PancakeSwap runs on smart contracts, meaning it may lose its assets.
Why is PancakeSwap so popular?
Platforms such as Pancake Swap work as automated market makers (AMMs). Smart contracts encrypt the tokens and coins used in an exchange and automatically process requests.
Other users can earn rewards on the platform without the involvement of the mediators of centralized exchanges. With liquidity pools and betting options, you can reap substantial rewards for lending your tokens for a while.
PancakeSwap Binance
PancakeSwap uses Binance Smart Chain, even though many DApps such as UniSwap use Ethereum-based contracts. Does this mean the platform has some tricks up its sleeve, or does it potentially pose a bottleneck?
With its low fees and faster transactions than Ethereum, Binance Smart Chain is on a meteoric rise. According to Binance, the platform handled 4.9 million transactions in a single day in June 2021, three times more than Ethereum ever did in a day. Although PancakeSwap DEX doesn’t boast a tremendous daily trading volume, it has other features and has excellent potential for growth in the future.
Uniswap and SushiSwap are the current market leaders with their 400-pound DEX gorillas. ETH gas, however, is directly tied to the price of ERC20.
Is PancakeSwap safe?
CertiK audited PancakeSwap.
Does that mean you can use it without worries? Not at all. It is risky to deposit funds into a smart contract, even for highly reputable projects. Avoid making excessive deposits.
Bottom Line
PancakeSwap’s final consideration impacts its independence from Ethereum. This is undoubtedly the top decentralized exchange to compete with other well-known decentralized exchanges like Uniswap. Several other distinct features on the platform, including the lottery and NFT rewards, both of which are beautiful.
Furthermore, the Smart Chain functionality is also essential to support the expansion of Binance as a decentralized exchange by looking at its capabilities. PancakeSwap’s safety is still a concern, so it continues to present some issues. A DEX ofDUE TO ITS WIDESPREAD AWARENESS, such an innovative concept would eventually be adopted due to the practical implications of DEXs and the AMM system and decentralized exchanges.