Exchange

Beginner’s guide to PancakeSwap!

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As one of the largest decentralised applications (dApps) in the Binance Smart Chain ecosystem, PancakeSwap has endless potential to satisfy your trading needs and open up a world of opportunities for your crypto investments. 

Get to know why it is on top of the game in the crypto-sphere by checking out its details below: 

What is PancakeSwap? 

PancakeSwap is a decentralised exchange (DEX) and automated market maker (AMM) powered by Binance Smart Chain (BSC) that allows users to participate in liquidity pools and seamlessly trade BEP-20 tokens, blockchain-based assets used to create and issue smart contracts within the BSC. 

A fourth-generation blockchain where BEP-20 tokens and dApps can be built, the BSC is an ecosystem where users are provided with a faster and cheaper way to transact. It can produce a block every 3 seconds with its ultra-high performance capabilities. 

Thus, DEXs within the BSC, specifically PancakeSwap, share the same rate, making it one of the fastest exchange platforms in terms of processing transactions.

PancakeSwap and its purpose in the BEP-20 exchange

BSC enables the creation of smart contracts and the staking mechanism for the Binance coin (BNB) through the BEP-20 token. Since both BEP-20 and PancakeSwap exist within the BSC blockchain, users of the latter can trade these tokens for far less and enjoy opportunities you wouldn’t see in other blockchain-based assets like Ethereum’s ERC-20.   

Different programs and features of PancakeSwap 

Aside from being a decentralised exchange platform, PancakeSwap also functions as an AMM which uses platform leverage liquidity pools and complex algorithms to create a direct link between buyers and sellers instead of using the age-old order book. 

Through AMM, PancakeSwap provides users with better speed, rates and less chance of slippage in their transactions. Check out how the different programs within PancakeSwap work below: 

PancakeSwap liquidity pools 

As a PancakeSwap user, you can contribute to liquidity pools and receive liquidity provider (LP) tokens in return within the platform. The value of the LPs you collect would appreciate as the value of your liquidity pool rises. 

What makes PancakeSwap’s liquidity pools amazing is that it is permissionless and allows you to earn without having to trade your assets directly. The average annual percentage yield (AYP) in PancakeSwap liquidity pools can range from 23.52% up to 378.19% and would be paid in CAKE, PancakeSwap’s native token.

SYRUP pools 

SYRUP pools are PancakeSwap’s exclusive pools with extremely high rewards. The yield here can range from 43.33% to 275.12% AYP. What makes it even better is that you can earn other tokens aside from CAKE such as LINA, UST, SWINGBY and other ERC-20 tokens in these pools.

Liquidity pool (LP) tokens 

If you are an LP token holder, you will be provided with access to several revenue streams for simply participating in the pools. What this means is that you would have a portion of the fees generated within the platform redistributed back to you. On average, 0.17% of the 0.2% fee would be your earnings.

PancakeSwap DEX

DEX is the main feature of PancakeSwap. It is made from the ground up to provide users with ease in trading by giving them access to all the features needed for an effective transaction. What’s impressive about PancakeSwap’s DEX is that it is fast with a rate of 1 transaction every 3 seconds and provides plenty of cryptocurrency options for your trade such as ETH, LBLOCK, BUSD and CAKE. 

PancakeSwap yield farm 

Yield farming pools are supported within the PancakeSwap platform. These types of pools allow you to lend your crypto token via smart contracts to different projects within the platform without any lockup periods. In return for lending your token, you will receive a reward. 

PancakeSwap staking 

PancakeSwap staking works similarly to yield farming. You stake CAKE within PancakeSwap and lock it up in a staking pool for time. Once your lockup period is over, you will earn your reward for participating. The amount you would reach in this type of investment depends entirely on how much you lent and how long you set your lockup period. 

Initial farm offering (IFO) 

IFO is a unique feature of PancakeSwap and is considered the democratic and decentralised version of the initial coin offering (ICO). How it works is that instead of purchasing news tokens directly like in ICO, users can hold their LP tokens in supported pools to gain access to newly issued tokens once they are available for sale. 

What makes it even more amazing is that you can launch IFO by simply seeding a farm pool within PancakeSwap. 

Non-fungible tokens (NFT) 

PancakeSwap supports staking and trading NFTs within its platform. You can even find special NFT rewards when you participate in the PancakeSwap lottery. 

And to simplify the creation and launching of fractional non-fungible tokens (FNFT) and NFTs, PancakeSwap launched the BEP-721 protocol as an NFT standard, a modified version of Ethereum’s ERC-721.

PancakeSwap Treasure 

PancakeSwap Treasure is the protocol within the platform responsible for routinely burning tokens in response to market conditions. In addition to this, Treasure also handles the provision of funding for the further development of the PancakeSwap network. These funds are collected from 0.03% of all trading fees within the platform.

PancakeSwap lottery 

PancakeSwap hosts four lotteries every day to provide users with a good time within the platform. Through the lottery, you can win exclusive collectable NFTs and CAKE rewards. All you have to do is to stake at least 10 CAKE in the lottery to participate.

5 reasons why you should invest in PancakeSwap 

PancakeSwap provides users with a solid opportunity to invest and earn more revenue for their investment. Check out why you should use PancakeSwap below: 

  1. Constant revenue from trading fees 

If you participate in the liquidity pools as a provider, you would be rewarded with a constant stream of revenue from the trading fee collected within the pool. The percentage of your earnings is about 0.17% of the fee collected. 

  1. Higher yields 

PancakeSwap offers higher yields than any other offering since your annual percentage rate (APR) is calculated based on the total amount of liquidity within the yield farm and the farm multiplier. Additionally, you would also receive an LP token for your participation in providing liquidity to the yield farm pools. 

  1. High level of security 

PancakeSwap is one of the few platforms audited by two blockchain security firms: CertiK and SlowMist. CertiK provides a rigorous formal verification technology within PancakeSwap, allowing the platform to resist any attempts of hacking. Meanwhile, Slowmist provides cybersecurity audits and protection to the leading assets within the platform. 

  1. Cheaper fees, faster transaction

It only takes 3 seconds for PancakeSwap to process a transaction and create a block within BSC, making it one of the fastest in the world. And since the BEP-20 tokens traded within PancakeSwap exist within the BSC blockchain, the fees for each transaction also come cheap. 

Cryptocurrency Market Capitalization
  • bitcoinBitcoin (BTC) $ 19,402.30 0.69%
  • ethereumEthereum (ETH) $ 1,327.40 0.62%
  • tetherTether (USDT) $ 1.00 0.03%
  • usd-coinUSD Coin (USDC) $ 1.00 0.01%
  • bnbBNB (BNB) $ 284.21 0.14%
  • xrpXRP (XRP) $ 0.476680 0.69%
  • binance-usdBinance USD (BUSD) $ 0.999453 0.31%
  • cardanoCardano (ADA) $ 0.434376 0.92%
  • solanaSolana (SOL) $ 32.96 2.95%
  • dogecoinDogecoin (DOGE) $ 0.062804 3.78%

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