What is Pancake Swap (CAKE)?
It aims to compete with Ethereum-based decentralized exchanges with smaller fees and rapid transactions—plus other unique hooks.
PancakeSwap uses an automated market maker model where users trade against a liquidity pool. These pools are filled by users who deposit their funds into the pool and receive liquidity provider (LP) tokens in return.
Token swaps take place via liquidity pools between token pairs. Users are able to exchange one type of token for another without an intermediary, while other users who stake their tokens in the liquidity pools earn a share of the rewards generated by transactions. On the farm, users can deposit LP tokens and get rewarded with CAKE.
PancakeSwap also allows users to farm additional tokens such as SYRUP. The DEX lets you stake coins into so-called Syrup Pools that provide growing rewards. For example, you can stake CAKE, PancakeSwap’s native token, and earn even more CAKE just by letting it sit there in the Syrup Pool over time.
Even though Binance operates a centralized exchange service, it does not control or operate PancakeSwap—it was built by anonymous developers.
The service looks and feels very similar to the popular Ethereum DEX, Uniswap. PancakeSwap is used specifically for BEP-20 tokens running on Binance Smart Chain, although it’s possible to bring over tokens from other platforms via Binance Bridge and “wrap” them as a BEP-20 token for use on the DEX.