What Is PancakeSwap App?
PancakeSwap – the largest decentralized exchange (DEX) in the Binance Smart Chain (BSC) network under the BEP-20 standard, which launched on September 20, 2020. Help in the launch was provided by the developers of Binance, but who exactly, is not disclosed. In little more than a year, the exchange managed to capture the main part of the audience on the crypto market and reach the trading volume in 24 hours equal to 30,000 BTC, which is equivalent to $ 1,700,000,000. Today we will take apart all about PancakeSwap, we will tell how to participate in IFO and earn on it, how to stake your assets and farming, and many other interesting things. Get your tea ready, get your liveries, and we’ll get started.
Following the success of the decentralized exchange (DEX) Uniswap, its clones, such as SushiSwap, began to appear with slightly different capabilities. PancakeSwap appeared as another Uniswap clone but was not created for the Ethereum network, but for the BSC network while being compatible with Ethereum.
Uniswap became an alternative platform for those who wanted to pay less commission or trade tokens that are not accepted on centralized exchanges. But as the cost of Ethereum rose, the commission became so high that users started looking for another solution. If you wanted to transfer $100 worth of cryptocurrency to Uniswap now, you would have to pay a commission close to $14, and in February the cost was as high as $40.
PancakeSwap works in BSC, which means it does not suffer from the high commission of the Ethereum network, so users began to quickly move from centralized exchanges and Uniswap to this site. The platform opened on February 8, and in just one day it was transferred cryptocurrency exceeding $1 billion in value. A month and a half later, despite technical problems, PancakeSwap has already gained $4.27 billion, yielding slightly to Uniswap ($5.04 billion) and SushiSwap ($4.86 billion).
You will find these sections in the menu on the exchange site:
- Prediction. Every 5 minutes, a bank of those who think that BNB will rise or fall against the dollar is formed. The final pot is distributed among the winners, giving multiplication according to the odds. The data is provided by the Chainlink oracle network.
- Collectibles (NFT). Users can create profiles on PancakeSwap Finance. Activity is rewarded with cards. These are real BEP-721 tokens in the BSC network. At a minimum, these NFTs can be put as a profile avatar on PCS, or sold.
- Team Battle. When registering for PancakeSwap you need to choose a faction: Fearsome Flippers, Syrup Storm, Chaotic Cakers. This will not affect trading, but during active contests teams get points, gifts are given: NFT and cash prizes.
- Total provided liquidity, TVL, trading volume in 24 hours (in $). Ranking of tokens, pools with filters, and search. Detailed chart for each individual asset, with % APR, rates, and amount of awards for LP. List of recent transactions.
- Voting. Fill out a form with a proposal and start voting. If you find support, the idea will be implemented. Separately, the development team constantly publishes plans in the Core category. The majority adjusts the direction of development by voting for or against it.
- IFO – an offer for public presale of tokens. Users will be able to buy them for LP CAKE-BNB tokens up to $100. Above this mark, a growing additional commission begins to avoid the purchase of all coins by single individuals.
What CAKE-farmers earn on
On commissions within the exchanger, on the swap of the coins in which the liquidity is invested, as well as for providing this very liquidity in exchange pairs. Simply put, in order for the exchange rate to remain within the normal range and the Pancake Swap commission not to skyrocket, there has to be money left at the site.
That’s exactly what farmers do, getting paid. To join their ranks, you must:
- Have a BNB BEP-20.
- Have a supported PancakeSwap wallet, for example, Trust Wallet (there are a lot about how to connect trust wallet to pancake on the web, so we will not dwell on this question now).
- Have free assets, which you can send to work.
- Determine the object and the terms of farming (which Coins will be required for this). Details can be found in the relevant section on the official website of PancakeSwap.
As you have already understood, PancakeSwap needs a liquidity pool to make transactions. Those wishing to make an exchange receive tokens not from the seller, but from the exchange’s liquidity pool, for which they pay a commission of 0.20%. By investing your tokens in the liquidity pool you will receive some percentage of income from those transactions. According to SYRUP, staking now yields up to 138% per annum, depending on the token.
To estimate possible CAKE perspectives, we should go back in time for several months to estimate the rate dynamics. Back in the middle of January, the coin cost $0.6, but from the beginning of February, it began to grow wildly, which allowed CAKE to take the bar of $17.5 per unit at its peak. The listing of the token at Gate.io contributed to it to a great extent.
You can now buy cryptocurrency. At the top center, you will find a search box. Click on it and enter the name of the coin. Then the cryptocurrency will be displayed, and clicking on the name will open a new page with more information about your coin. When you click “Transaction,” you can see what options are available when you buy cryptocurrency.
Buy or Sell: This option determines whether to buy or sell. Immediate or Order: this option determines whether to make a pending purchase or an immediate purchase. Quantity: You only need to enter the quantity you want to buy in PancakeSwap (CAKE). Stop Loss and Take Profit: As soon as your profit or loss reaches a certain level, you can use this option to automatically close the position.
Risks of staking
We shouldn’t forget that cryptocurrency staking has advantages as well as risks. Here are the main ones:
- Cryptocurrency prices are relatively volatile, meaning they can depreciate quickly. If prices fall too much, you could incur losses.
- It can take anywhere from seven days to withdraw assets from stacking. By the way, Bybit has implemented flexible stacking that allows for instant withdrawal of assets from stacking.
When using coins for stacking, it is important to understand that these coins will remain locked for a short period of time. This means that you will not be able to do anything with these assets during that period of time.
This section is located in the “Transactions” → “Liquidity” tab. Here you will receive rewards by sending your coins (BEP20) to liquidity pools or just trading them. There is no need to search for seller/buyer of cryptocurrency (as it is implemented in centralized exchanges), all pools are secured by users (AMM). Therefore, the whole process happens automatically. So, let’s say you decided to add liquidity to PancakeSwap (by investing in a common pool). For that, you will get a reward in the form of a part of trade fees, and in return for yours – LP tokens (supplier coins). These LPs can be used to return yours (sent to liquidity), as well as to farm, making a profit. But more about that below.
Coin Stacking in Launch Pool
CAKE tokens earned on the site can be stacked with interest for additional profit. To do this, you need to go to the “Staking” section and confirm the contract that your tokens will go with the interest. For example, if you have 300 percent, then you will receive 0.8% per day (300/365=0.8) or 24% of the amount per month.
Interest is dynamic, it depends on how much money is invested in the pool. More assets – less interest. If the value of invested coins will increase, your income in Cake equivalent will increase, and the annual percentage will decrease. If the conditions are diametrically opposite, the situation will be the opposite.
When working with this tool, it is recommended to invest only those amounts that you can afford to lose. There is always the possibility of hacking, fraud, and technical errors, from which no one is immune. Plus, never invest all of your money in pools – send only a fraction of your money to them.
It’s important to understand that cryptocurrency, in general, is not making money in the classic form. It is an extremely risky type of investment, primarily due to the volatility of the crypto market. Not only can a coin rise significantly, but it can also collapse, and no one can predict exactly what scenario it will follow. Moreover, the LP-wrapped tokens will be worthless by the time you “unwrap” them, even with the CAKE you have forged.
So, if taking risks is not your thing (on the other hand, investments in cryptocurrencies are already a very high risk), then choose pairs with less volatility and, consequently, profitability.
Advantages and disadvantages of PancakeSwap
Let’s see what advantages and disadvantages can be highlighted in the project PancakeSwap.
- A large number of users who have entrusted more than $14 billion to the platform;
- No registration and verification (you just need to connect your cryptocurrency wallet to the platform);
- Compatibility with browser and mobile wallets (choose a more convenient solution);
- Fast and cheap transactions;
- Wide functionality: cryptocurrency exchanger, adding liquidity, pharming, lottery, team competitions, NFT tokens, participation in IFO;
- Relatively high level of security;
- Developed partnerships with various platforms and blockchains;
- Emphasis on gamification: earn by playing.
Today, PancakeSwap can be categorized as a leading automated market maker. Thanks to the BSC blockchain, which makes the transactions fast and cheap, the service looks more attractive than its nearest Ethereum counterparts. This largely explains the popularity of Pancake. Reviews about the site from users on the Internet are mostly positive.
The roadmap of the project involves many innovations like lending and borrowing assets, connecting margin trading, binary options, and more. In other words, the project has a great future, but the success largely depends on the timing of the implementation and quality of new services. Time will tell how it will turn out.