It is the biggest DeFi protocol on the BINANCE Smart Chain and one of the most popular DeFi projects in general. It offers plenty of great features including a DEX, a Launchpad, a lottery, a NFT market and more. The application kick started the growth of the DeFi ecosystem of the BSC blockchain and continues to be its largest application.
The PancakeSwap decentralized exchange is the largest DEX on its blockchain and has attracted many users due to the low fees and variety of tokens that the Binance Smart Chain offers. The DEX uses liquidity pools and an AMM, like Uniswap, to set its prices and offer simple trading. The providers of the necessary liquidity are not only earning trading fees of 0.25% but additionally also the native CAKE token if they stake their LP tokens in a yield farm. A fee of 0.05% per trade is also used to buy back and burn CAKE tokens as a sort of dividend payment for CAKE holders.
The platform offers Initial Farm Offerings which are basically a type of Launchpad where the developers of a new dApp can sell their new token for CAKE to raise funds. And there are "Syrup Pools" where developers can promote their project by letting CAKE holders earn their new token for free. Some Syrup Pools also distribute new CAKE tokens to stakers of CAKE and other tokens.
Pancake also makes earning cryptocurrency fun. It has a lottery game where people can buy tickets with CAKE tokens, 20% of the CAKE used for that is being burned the rest is pooled together and earned by the winning tickets. The lottery game restarts every 12 hours and about 5,000 new CAKE tokens are injected into the price pool on averange to incentivise participation in the game. Users can also make bets on whenever the price of BNB in USDT will rise or fall within the next 5 minutes.
On top of all of this DeFi tools there is also a NFT marketplace with lots of unique artwork. Although, like with most such marketplaces, most NFTs are just overpriced jpegs, still plenty of people like to toy with them and Pancakeswap has much lower fees than any marketplace on Ethereum.
All of those features make Pancakeswap are true DeFi behemoth of the Binance Smart Chain and it will likely stay its most used dApp for a long time. The only downside with it is that the BSC chain itself is centralized and by extension the protocol is centralized too.
The CAKE Token
CAKE is the governance token of PancakeSwap. It gives its holders the right propose and vote on changes to the platform. The token is also used to pay for various fees and to reward the liquidity providers.
There is no max supply and the users keep earning new tokens by staking their LP tokens, by staking CAKE and other tokens on Syrup Pools and by winning the lottery. There was a fair launch which means that the entire supply was distributed to the users directly since day one. Part of the fees for trading, Initial Farm Offerings, the creation and selling of NFTs, purchase of lottery tickets and prediction markets are being used for burning.
Currently 40 new CAKE are minted with each block, roughly 25% is going to the Syrup Pools, 10.62% is going to the liquidity providers and the lottery and the rest is getting burned. It’s important to mention that the inflation shrinks percentage wise because the total number distributed is fixed and will have less of an impact if the circulating supply is higher, but there will be more burned if more people use the platform. So the inflation will eventually become less while the deflation hopefully becomes more.
Should you choose to invest in CAKE or earn it by using PancakeSwap then you should make sure to stake your tokens on a Syrup Pool because that way you can earn a huge APY of currently 60%.
Like with all DeFi applications, the value of its token depends on how many funds are in its smart contracts and on how many people use it. Since there is no shortage of tools and the BSC chain has low fees, there already are a lot of users and funds and this will likely continue to grow. The tokenomics are also great. All of the supply is going to the users and is rewarding early and long term users the most. Still the dApp obviously depends on the Binance Smart Chain and while this chain is very popular due to its low fees and simplicity, it is still centralized.
You can buy CAKE on centralized exchanges like and KuCoin. Of course you can also buy it on PancakeSwap too, but you will need BNB for that. You can use TrustWallet to store CAKE and to use the applications.
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