Do you love some warm pancakes with syrup drizzled over them? Do you love crypto? PancakeSwap might be the right place for you! PancakeSwap has been bustling with business lately with the hyped up, new DeFi tokens coming into the crypto market. In this article, I will be taking a closer look at PancakeSwap and going over how it works and what separates it from other swapping exchanges.
I am not sponsored by anyone or anything mentioned in this article.
This is not financial advice. I am not a financial advisor.
Please do your own research before making any decisions before investing.
This article is meant for educational purposes only.
PancakeSwap ($CAKE) is a decentralized exchange for swapping BEP-20 tokens. BEP-20 is a token standard on the Binance Smart Chain that extends ERC-20, the most commonly transacted Ethereum token standard. PancakeSwap operates on an automated market maker (AMM) model. This means that trading digital assets isn't performed through an order book, but instead traded against a liquidity pool. The goal of this platform is to provide a flexible format for developers to launch a wide variety of different tokens.
Liquidity pools are filled with users' funds. Deposits are made into the pool, receiving liquidity provider (LP) tokens in return. The user can then use these tokens to reclaim their stake and, in addition, a portion of the trading fees. This means you can trade BEP-20 tokens, swap them, or add liquidity and earn rewards. BEP-20 token transfers are fueled with BNB, just like BEP-2 tokens. BEP-2 tokens can be swapped for their BEP-20 equivalent utilizing PancakeSwap or a crypto wallet with this capability.
Hungry yet?
PancakeSwap allows you to farm its governance token, CAKE. In this sense, you can literally have your cake and eat it too! On this farm, you can deposit your LP tokens in a process that rewards you with CAKE. Popular examples of LP token deposits are CAKE - BNB LP and ESDT - BUSD LP. If you stake your CAKE in SYRUP pools, you can earn even more rewards.
You have the option to stake your CAKE to earn more CAKE in the SYRUP pool. You can also earn new tokens by staking CAKE. The APY% of these stakes are high and attract the trader's attention when compared to other staking routes. In order to access the many features PancakeSwap has to offer, you need to unlock your wallet and connect it to the platform. Crypto wallets that offer browsers within them, such as MetaMask or Trust Wallet, are the most popular ways to do this. Once your wallet is connected, you'll be able to see that different LP tokens promise different returns. It's up to you to pick the one that works out best for you!
PancakeSwap is definitely the biggest AMM project on the BINANCE Smart Chain by far. The innovative features separates this platform from their competitors, and it's only gaining in popularity... especially in the recent month! Ethereum definitely kickstarted the DeFi trend, but initiatives like this suggest that this is only the beginning.
You can check out the price statistics of PancakeSwap here. I believe that PancakeSwap sets the standard for the exchanging and swapping industry with newer features and rewards being added to the platform every month. It's only a matter of time before this innovation spreads to other blockchains. Good thing these chains already have a leader to follow... PancakeSwap!
The current trading price for CAKE is $41.88 at the time of writing this article.
Which exchange do you use for swapping your tokens?
Let us know in the comments down below!
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