PancakeSwap News and Updates
What is PancakeSwap?
How does PancakeSwap Work?
5 Reasons to Start Investing in PancakeSwap (Not Financial Advice)
How to Use PancakeSwap
Should You Start Investing in PancakeSwap Right Now?
The Bottomline – Future of DeFi
PancakeSwap is a decentralized exchange based on the Binance Smart Chain. It was launched by an anonymous group of developers.
The PancakeSwap logo represents a pancake, in line with the theme of the service, and in this PancakeSwap review and user guide, we’ll go over everything about PancakeSwap Farming and more.
Pancake crypto has been historically compared to SushiSwap; however, that DEX is built on top of the Ethereum blockchain, which can be a lot more expensive, while PancakeSwap is built on the Binance Smart Chain. You might have also seen a lot of UniSwap, PancakeSwap, SushiSwap comparisons.
PancakeSwap has community governance. It gives users the ability to farm liquidity, provides tokens, and incorporates other specific features which make it stand out and let you earn rewards.
The PancakeSwap price also fluctuates based on various factors. Let’s dive in and go over everything that makes PancakeSwap so unique.
PancakeSwap News and Updates
- PancakeSwap announced some adjustments to the Syrup pools rewards proposal on 9 August 2022. This proposal will reduce CAKE emissions from the Syrup pools.
- A total of 7,040,800 CAKE were burned from trading fees, gambling prediction, and lottery fees on 8 August 2022.
What is PancakeSwap?
PancakeSwap is a decentralized exchange developed to facilitate the swapping of BEP-20 tokens.
BEP-20 is a Binance token standard that needs to be followed on the Binance Smart Chain. This is an abbreviation that is short for Binance Smart Chain Evolution Proposal. That said, if any other token standard wants to be transferable on PancakeSwap, it needs to be wrapped in the BEP-20 standard for the swap.
The main point of the appeal behind PancakeSwap is that it is a fully decentralized exchange where the orders and trades are automatically executed through smart contracts.
The platform was launched in September of 2020. While we do not really know who the development team behind the platform is, it has been regularly audited by blockchain security companies, such as Slowmist and Certik.
So, if you are curious as to whether PancakeSwap is safe, be concerned no more; it has frequent security audits, so you can trade PancakeSwap’s CAKE and other assets with peace of mind.
Additionally, PancakeSwap uses an automated market maker model (AMM), which means that while you can trade digital assets on the platform, there is not an order book where you are directly matched with someone else. All trading occurs against a liquidity pool.
Each liquidity pool is filled with the funds of other users, which need to be deposited into the pool. By doing so, they have been rewarded with liquidity provider (LP) tokens. These tokens can, later on, be used to earn rewards.
How does PancakeSwap Work?
Here is how PancakeSwap works. PancakeSwap leverages its own utility token known as CAKE, which is the PancakeSwap token.
The CAKE token is used in a variety of different ways within the PancakeSwap platform, including:
- Yield Farming – done through the PancakeSwap farm
- PancakeSwap staking
- The PancakeSwap Lottery
- Voting on Governance Proposals through the Community Governance Portal
It is clear that the CAKE token has a high level of utility, but here’s how the rest of PancakeSwap Finance works.
Users essentially trade on the platform by drawing liquidity from one or more of the mentioned liquidity pools, rebalancing after a trade is completed. Adding liquidity on PancakeSwap is a process where users add liquidity to pools, which participants can do by having assets in a supported wallet like Binance Smart Wallet.
Trades that occur here subtract liquidity from one side of the pool and provide liquidity to the other, which changes the pool in terms of its relative values.
These liquidity pools get filled by users who lock their tokens through smart contracts. Transactions, as a result, occur between the trader and the liquidity pool.
Every time a trader makes an exchange, they need to pay a commission, of which a percentage goes to the liquidity providers. Another portion e goes to the project budget, as well as towards CAKE buyback and burn proposals.
This, in turn, allows users to exchange tokens and earn rewards. Another interesting aspect about PancakeSwap is that no registration or verification is required, making getting started on the platform a lot quicker. It also leaves users with a high level of anonymity.
It has lower fees and quicker transactions when compared to exchanges which are based on the Ethereum network as well.
If you want to carry out transactions, you do not need to transfer your tokens to an account on your exchange; you can just use a supported cryptocurrency wallet.
The platform also provides multiple opportunities to earn money through yield farming, staking, and the lottery.
PancakeSwap also allows users to buy tokens in early-stage projects before its public launch, which brings a higher level of excitement for many investors who might want to jump in on new projects early to get high returns later on. Keep reading as reason number 5 will surprise you.
5 Reasons to Start Investing in PancakeSwap (Not Financial Advice)
There are multiple reasons why investing in PancakeSwap can be a solid opportunity for you. We’ve highlighted the top 5 reasons here, but remember, this is not financial advice.
1. Constant revenue stream from trading Fee
When it comes to the fees on PancakeSwap, here is what you need to know:
When you make a token swap or trade on the exchange, you need to pay a 0.25% trading fee, which is divided into three pieces.
- First, there’s 0.17% that gets returned to the liquidity pools in the form of a fee reward for the liquidity providers (LPs).
- Then there’s a 0.03% fee sent to the PancakeSwap Treasury.
- Last but not least is a 0.05% fee which gets sent to facilitate CAKE buyback and burn.
So if you are a liquidity provider and curious about how PancakeSwap makes money, now you know. The more money they make, the greater the effect on the Cake governance token price.
2. Higher yield
Through the usage of PancakeSwap, you can get a higher yield when compared to other offerings. In terms of the yield farm APR, here is how it is calculated:
- First, the LP rewards APR is earned through providing liquidity.
- Second, the farm base rewards APR are earned through staking LP Tokens in the farm.
The farm base APR is calculated in accordance with the farm multiplier and the total amount of liquidity of the farm, which is the number of CAKE tokens distributed on it. Farmers also receive LP rewards for providing liquidity. One more thing you need to be cautious about whenever you do yield farming on any DeFi pool is an impermanent loss. Therefore, it is recommended for anyone who wants to start yield farming to learn more about what exactly impermanent is before investing in DeFi
As of the day we write this article in Jan 2022, you can earn up to 440% APR, but please note that the yield % you are seeing right now is not promising due to the coin price volatility and the number of the multipliers.
The best way to mitigate the risk is to understand what you are investing in. Please be cautious and follow the latest news and updates to make sure that you are not missing out when an unexpected occurrence comes up.
3. A higher level of security when compared to other DeFi yield farming platforms
If you are curious to learn how safe PancakeSwap is, note that it has a higher level of security when compared to other DeFi protocols. It is audited by two prominent blockchain security firms:
- CertiK – uses rigorous Formal Verification technology to provide hacker-resistant smart contract and blockchain audits through penetration testing, among other methods.
- Slowmist – provides cybersecurity audits and protection for leading asset exchanges, cryptocurrency wallets, public chains, and smart contracts.
Depositing funds into smart contracts always has some risk for bugs, even for audited projects; however, knowing that multiple security firms are involved in auditing PancakeSwap gives it a higher security rating than others.
4. Staking through Auto-Compound
Through PancakeSwap’s auto-compounding feature, rather than users having to manually re-stake their CAKE tokens to get the best APY, this is a process that is done automatically. This is how to stake in PancakeSwap.
5. PancakeSwap is backed by Binance
PancakeSwap is a decentralized exchange built on top of the Binance Smart Chain, a quick and inexpensive alternative to Ethereum. The BSC is run by Binance, the owner of the world’s largest cryptocurrency exchange. There is a rumour that Binance even developed Pancakeswap but nobody can confirm whether that is true or not.
- Bonus: Lottery and NFTs Available on PancakeSwap
PancakeSwap’s lottery gives users a chance to win prizes in the form of CAKE tokens. The lottery ticket prices are set at each lottery round and can vary with sudden price fluctuations. You can even buy lottery tickets in bulk to increase your odds of winning and get a bulk discount for doing so.
By default, each lottery session takes 6 hours, and one ticket can cost 10 CAKE tokens, which will give you a random four-digit combination of numbers between 1 and 14. To win the jackpot, which is 50% of the entire lottery pool, the numbers in the ticket you have to match all four numbers in the same order as the winning ticket.
Now that you know why you should start investing in PancakeSwap, we will teach you how to use PancakeSwap Step by Step. Here is our Beginner’s guide on how to use PancakeSwap.
How to Use PancakeSwap
Step 1: Create Your Crypto Wallet (MetaMask or Binance Smart Wallet Are Recommended)
To use PancakeSwap, you will first need to connect it to your cryptocurrency wallet. If you don’t know how to connect a trust wallet or any other wallet to PancakeSwap, here is what you need to do to use CAKE PancakeSwap, and eventually convert PancakeSwap into USD.
PancakeSwap works with multiple wallets, but we recommend using:
- MetaMask Wallet
- Binance Smart Wallet
- Trust Wallet PancakeSwap
At this stage, you might be wondering: how to connect a wallet to PancakeSwap?To connect a wallet, all you need to do is click on the “Connect” button, which will be located in the top right corner of the screen, after which a pop-up window should appear on your screen with the list of all of the supported wallets, as well as the instructions on how to get a crypto wallet.
This is also how to use PancakeSwap with a trust wallet and connect PancakeSwap to a trust wallet. Before trading, always look for PancakeSwap price predictions, and go over the PancakeSwap tokenomics.
To learn how to transfer CAKE from Binance to PancakeSwap, read further. It works similarly, and you can use the PancakeSwap trust wallet.
Step 2: Transfer your Crypto Coin from Your Wallet
If you want to transfer your crypto coins from your wallet, all you have to do is go to the sidebar menu and click on “Trade,” followed by “Exchange,” where you can select the token that you want to exchange, and the one you want to receive. All you have to do to complete the transaction is to confirm it in your wallet. This is also how to buy PancakeSwap, where you can swap one token for another.
Step 3: Add Liquidity Pool
To provide liquidity to a pool, click on “Trade” followed by “Liquidity,” then click on “Add Liquidity” in the pop-up window, after which you need to specify the pair of tokens that you want to deposit to provide liquidity. After confirming the transaction, you will earn an LP token corresponding to the pair you initially provided.
Step 4: Select Farming Pool
To farm, all you have to do is click on “Earn” followed by “Farms” and select a farm for your LP tokens, after which you can specify the amount to farm and confirm the operation.
Step 5: Staking on PancakeSwap
If you are curious about how to stake PancakeSwap, you will first need CAKE tokens to perform this function successfully.
In order for you to start staking, you will need to click on “Earn” followed by “Pools” and select the pool you want. Then, send CAKE tokens to that selected pool. This way, the profit you earn can be withdrawn through the “Harvest” option or reinvested through the “Compound” option.
This is also how to stake PancakeSwap on a trust wallet. Remember to double-check the PancakeSwap price impact too.
Should You Start Investing in PancakeSwap Right Now?
This will be highly dependent on your specific financial needs as well as investment goals. PancakeSwap has some of the lowest transaction fees, the main driver that allows this DEX to reach such a high level of popularity.
Through investing in PancakeSwap, you have multiple options. You can earn additional money through the process of yield farming and PancakeSwap staking, both of which are easy to engage in thanks to the intuitive design of the user interface found on PancakeSwap.
Furthermore, because it is fully built on top of the Binance Smart Chain, it gets the advantage of having a high level of liquidity.
PancakeSwap has the largest number of daily users for this type of decentralized application (dApp). As such, it has an extremely high daily trading volume, which is excellent if you are an investor looking for tokens to trade. Note that the PancakeSwap founder is anonymous.
Furthermore, note that all cryptocurrency investments have a certain level of risks associated with them, as it is highly speculative. Nevertheless, staking CAKE on PancakeSwap is a solid option if you are looking to earn more from your crypto investments.
You can also find PancakeSwap price predictions online and PancakeSwap V2 information to further help you decide.
Note that you need to know about the price fluctuations of PancakeSwap, the PancakeSwap tokenomics, the PancakeSwap sniper bot, the PancakeSwap merchandise, the PancakeSwap Calculator, and the PancakeSwap slippage tolerance.
The Bottomline – Future of DeFi
PancakeSwap represents the future of decentralized finance (DeFi) and is built on the Binance Smart Chain, enabling extremely low transaction fees and rapid confirmation time.
Having a balanced portfolio is essential if you are a beginner investor, making the PancakeSwap app a solid option for you. That said, PancakeSwap exchange also offers many secondary features, which will provide additional utility across all holders of the CAKE tokens.
Exchange PancakeSwap is also partially governed by the community, where CAKE holders can use the native voting portal to vote on the governance proposals. It is the biggest AMM project built on top of the Binance Smart Chain (BSC) to date and brings innovative features that make it a worthwhile consideration for just about any investor.
Going forward, we will likely see a lot more use-cases for CAKE, specifically when it comes to Non-Fungible Token (NFT) collectibles through NFT Profiles, as well as other metaverse project-related use-cases.
