PancakeSwap (CAKE) took advantage of the low cost of BINANCE Smart Chain (BSC) to take second place in the DEX ecosystem.
BINANCE CHAIN AND BINANCE SMART CHAIN (BSC)
Binance Chain is a blockchain network built for the Binance cryptocurrency, the BNB. Originally, the BNB was an ERC-20 token on the Ethereum network that was issued in 2017 as part of an ICO before the stock market was launched. It was later transferred - in April 2019 - to the Binance Chain mainnet, where we can trade the BNB token faster and cheaper. In addition to sending and receiving BNBs over the network, Binance Chain has many other features.
In the case of the BSC, the idea is similar to that in the Ethereum network, while there the network's own token is ether, in which we pay the transaction cost, while in the case of Binance Chain such a function is performed by the BNB. We can issue new tokens (BEP-2 tokens) that can be traded on the Binance DEX (decentralized exchange), the Binance decentralized exchange that runs on the Binance Chain.
THE RISE OF PANCAKESWAP (CAKE)
PancakeSwap (CAKE) has emerged as a rising project in the decentralized financial (DeFi) space. Through a recent price increase, PancakeSwap has become Binance Smart Chain’s first $ 1 billion project.
The data show that the price of CAKE coin has risen 520% since reaching a low of $ 1.89 on Feb. 3. With that, he created ATH on February 17 at an exchange rate of $ 11.12.
The ever-growing DeFi ecosystem is gaining ground in the world of cryptocurrencies. Unlike most of the most popular projects currently running on the Ethereum network, other smaller networks like Binance Smart Chain are starting to get the interest of users. This is because these smaller systems are similarly reliable, and cheaper and faster.
While traffic on the Ethereum network has greatly increased, transactions are slow, congested, Binance Smart Chainen is still fast. And Binance did not raise the gas fee, but also reduced it from 15 to 10. This will also help and encourage smaller merchants to use the network.
According to Defistation, the total value recorded on the PancakeSwap protocol was $ 150 million on January 23 and rose to a new high of $ 2.477 billion on February 17. The increase in the value of the token and the addition of new economic opportunities drove this rally. CAKE coin trading has also jumped on the platform these days. The data shows that trading volume is now steadily rising, so the project took second place behind Uniswap (UNI).
The momentum in the cryptocurrency market and the rapid expansion of DeFi point to a further increase in the network transactions of the block chains involved. As Ethereum still operates with high gas tariffs and the network is also highly utilized, migration to other, smaller projects can also be expected.
Surely PancakeSwap also has more potential if we only rely on the growing mainstream attention of cryptocurrencies. By the way, Binance has always been a believer in stability and innovation. Certainly, if the Binance Smart Chain works properly, there could be larger migrations as well. In any case, the DeFi sector is still a relatively new, in many ways unknown world, so it is important to be aware of the risks involved.
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