What is PancakeSwap?

[CryptoRobotic]

What is PancakeSwap?

PancakeSwap is a decentralized cryptocurrency exchange (DEX) that is developed on the Binance Smart Chain (BSC) and is designed for exchange, Yield Farming using digital assets of the BEP-20 standard. This platform acts as an alternative to exchanges that operate on the Ethereum blockchain. Unlike crypto exchanges that are based on the Ethereum blockchain, PancakeSwap provides users with faster transactions and lower fees. 

In order to service trading operations, the exchange uses an automated market maker (AMM) model. This means that PancakeSwap lacks the order book that most cryptocurrency exchanges have. Instead, trading on this exchange is carried out using a liquidity pool that is filled with user funds. In return, they receive a reward in the form of liquidity provider (LP) tokens, which are designed to profit from trading fees, farming, and other types of cryptocurrency trading. 

The exchange has its own internal CAKE token, which bears similarities to Uniswap and SushiSwap. With this token, users can pay fees and receive rewards from the exchange.

 

History of the creation of PancakeSwap

The platform was launched on 20 September 2020, with the support of Binance. The founders of the project are still unknown. In February 2021, PancakeSwap became one of the largest crypto exchanges in the DeFi sector in terms of trading volume. In March 2021, it surpassed the Uniswap trading exchange by more than $1 billion on the total number of coins locked (TVL). 

According to Coinmarketcap, PancakeSwap is ranked 2nd in terms of trading volume, which is $988,680,276.

 

How to use PancakeSwap?

In order to start using the exchange, you should connect a Web3 wallet. To do this, the user needs to follow these steps:

Go to the official website of PancakeSwap.

Press the Connect icon.

Then, a drop-down menu will open, where you will have to select one of the crypto wallets.

Currently, the following wallets are available on the PancakeSwap exchange: TokenPocket, MetaMask, MathWallet, Binance Chain Wallet, TrustWallet, SafePal Wallet, WalletConnect, and Coin98 Wallet.

After you select the wallet, another window will appear where it is necessary to confirm authorization.

 

What features does PancakeSwap provide? Discover full features at our blog: https://cryptorobotics.co/‌a-guide-to-pancakeswap/

PancakeSwap exchange allows its users to make a profit using various tools and ways of earning money. Let’s take a closer look at each of them.

Exchange. To purchase and trade digital coins on the platform, you need to use BNB. These tokens can be purchased on PancakeSwap or Binance, and then transferred to your crypto wallet.

You can start trading digital coins on the exchange in the Trade section of the Exchange tab.

There are more than 1000 crypto trading pairs available on the PancakeSwap exchange. 

It is worth noting that when trading tokens, traders should pay 0.25% fees per transaction. These fees are distributed in the following manner: 0.03% is intended to grow the fund, 0.17% is divided among liquidity providers, and 0.05% is burned. 

Liquidity. In the Trade section, you can also get LP tokens and become a liquidity provider. In this case, you need to click on the Trade button, and then Liquidity and Add Liquidity. When the window appears, you must select two digital coins to fund the corresponding liquidity pool. But before that, it is recommended to study what Impermanent Loss is to be aware of the potential risks.

Farms. Farms on PancakeSwap are liquidity pools through which exchange and trading operations are carried out. In order to start making money on farming, users need to purchase LP tokens. These tokens can be invested in one of the farms to get a percentage of income. To start farming, the user must go to the Farms section and select the farm that corresponds to his LP tokens in the Liquidity section. For example, if you have selected CAKE-BNB LP trading pairs, then you need to select the CAKE-BNB farm. After completing these steps, you will be able to start the yield farming and receive rewards in the CAKE token. It is possible to get this token whenever by clicking the Harvest button. 

Pools. In this section, users have an opportunity to invest CAKE in syrup pools and in a manner to receive staking income. The staking reward will be the cryptocurrency of the project, in the pool of which you will invest your funds. For example, if you invest in the Earn SPS pool, you will receive the SPS digital asset accordingly. Users can get the reward after paying the transaction fee.

Prediction. You can use this feature in the beta version. It allows receiving income by predicting the BNB / USDT rate. In practice, this type of earnings is analogous to binary options with a round of 5 minutes.

Predictions are a very risky investment since it is quite difficult to accurately predict the future value of a digital asset in such a short period. Before placing a bet, the user must carefully study the rules and instructions.

Lottery. The PancakeSwap also allows its users to earn money by participating in the lottery, which takes place every 6 hours. If you want to participate in it, then you need to go to the Lottery section and purchase a ticket for 10 CAKE tokens. Then, you will receive a combination of four random numbers from 1 to 14. In order to win the jackpot (50% of the whole lottery pool), all 4 numbers on your lottery ticket must match four numbers in the same sequence as in the winning ticket.  If you only match 3 or 2 numbers, you will also receive a reward: 

You will receive a reward if you can match the following numbers:

• 4 numbers in exact order (get a prize or divide 50% of the pot if there are several winners).
• 3 numbers in exact order (get a prize or divide 20% of the pot if there are several winners).
• 2 numbers in exact order (get a prize or divide 10% of the pot if there are several winners).

Please note: if none of the participants can guess 3 numbers in any of the draws, the 20% allocated to the winners will expire forever.

Edited April 14, 2022 by CryptoRobotic

[Calaboose]

PancakeSwap is a cryptocurrency that was launched in September 2020. Many predict that PancakeSwap has huge growth potential in the future and looking to its continuous rise in popularity many people have started investing from now on.