It all began with ERC20 DEXs!
Everybody knows that when we were talking about DEXs (Decentralized Exchanges), we usually meant DEXs with ERC20 tokens. Whoever can create a token and add it in an ERC20 DEX. Of course, for every transaction, the fees are paid in ETH.
Nevertheless, during last months, the ETH fees are way too high in order to pay it. Many times, the fees can be over $50 per transaction.
Binance Smart Chain with BEP20 tokens
The high fees of Ethereum blockchain is the case that BSC (Binance Smart Chain) took advantage of. BSC achieves ~3 second block times and the fees in BSC are lower than $1 (I have seen fees between $0,05-$0,70).
So, the normal evolvement is that we have BSC DEXs (with BEP20 tokens). Keep in mind that Trust wallet is Binance’s official wallet and you can use it in order to connect to many networks (Binance Smart Chain, Ethereum, Ethereum Classic, Tomochain, Thunder token, GoChain, POA Network, Callisto)
Let’s dive into Trust wallet & PancakeSwap
Trust Wallet
- The first step is to download Trust wallet in our mobile device https://trustwallet.com/
- Create your wallet and save your Recovery phrase (this is the most important step as this is the only way to recover your wallet).
- In order to activate tokens, you should press the two horizontal lines at the upper right side of the App. Keep in mind that we will only deal with BEP20 tokens! The BNB token in BSC is named “Smart Chain” in the App.
- If you send BNB from Binance, in withdrawal page select BEP20. BEP20 addresses have the same format as ERC20. In Trust Wallet, ERC20 & BEP20 wallet address is the same.
- In order to connect with DEXs, we select “DApps” tab at the down side of the App.
Connect to PancakeSwap (BSC DEX)
Now, we are in “DApps” tab in Trust Wallet and we see some DApps that we can select and connect to. Keep in mind that this page is like a browser and on top there is an address line.
The most famous BSC DEX for farming is PancakeSwap. There is no need to manually enter the DEX’s link as it already exists in the preselected list. Just press PancakeSwap icon and you will be redirected to its website.
On the upper right side of the webpage select “Connect” and then select “Trust wallet”.
Moreover, on the upper right side, there is also an icon of the blockchain that we are currently using. If for example you see Ethereum’s icon, then press on it and select “Smart Chain” (note that we only work with BEP20 tokens & Smart Chain blockchain).
In every website that you visit, on the upper right corner, you can press the three dots and select Add bookmark. This will help you to quickly visit your favorites DEXs/websites.
Selections in Pancake (and in BSC farms in general)
The main selections that we are interested in, are the following:
- Trade: This selection includes “Exchange” & “Liquidity”.
Exchange: you can sell tokens in order to buy other. E.g., you can sell “Smart chain” (this is BNB in BEP20) and buy Cake
Liquidity (for Farms): You only need this, if you would like to add LP tokens in Farms (for Pools, this step is not needed). E.g.:
- We have 1 Smart Chain (BNB) in our wallet and we want to add liquidity in Cake-BNB LP farm.
- We go to Exchange page and sell 0,5 Smart Chain (BNB) for Cake tokens.
- Now, we have 0,5 BNB and Cakes (whose value is 0,5 Smart Chain). Almost all the Farms need 50%-50% balance between each token.
- We go to Liquidity page and press “Add liquidity”. We select our two tokens, e.g., Cake & BNB (Smart chain). This step creates a new token, which is “Cake-BNB LP” token.
- Farms: Here, we can add LP tokens (two tokens combined in a new unique one). We Approve Contract and then add LP tokens. In our example, we use the first farm and we add “Cake-BNB LP” tokens (see previous step hot to create LP tokens).
Before you invest in farms, be sure to do some research about Impermanent Loss.
- Pools: Here, we stake single tokens (not LP tokens). The most well-known is Cake pool. There, you stake Cake tokens and you earn Cake tokens. There are many pools, where in most of them you stake Cake and you earn Cake or other tokens. Sometimes, they are some pools where you stake other tokens (not Cake) and you earn Cake.
Useful tips
- Every Farm & Pool has a “Harvest” button. With harvest, you gather your earnings in your wallet and then you can add (stake) them as well.
We advise you to Harvest & Stake earnings every few days in order to earn more and more. But be careful about fees. If your earnings are around $20 it has meaning to harvest and stake them. If your earnings are $4-5, there is no meaning to spend around $1 fees for harvest & stake.
- Specifically Cake pool has a Compound button. This means that it will directly add your earnings in Cake pool in one transaction & fee (if you harvest & stake, you will pay fees for two transactions)
- In every Farm / Pool you can see the APR. next to the percentage, there is a small calculator icon. If you press it, you can see the ROI in case you harvest & stake your earnings every day. This means that the final earnings will be much more.
Again, be careful not to continuously harvest & stake as you pay fees for every transaction.
