What is PancakeSwap? This is the Guide For Those Who Want to Try

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This article will explain about PancakeSwap, from how it works to its advantages. Come on, take a good look.

What is PancakeSwap?

Ever heard of the term PancakeSwap?

PancakeSwap is a decentralized exchange that allows its users to trade cryptocurrencies and tokens without a centralized intermediary.

The service is built on the automated smart contracts used on Binance Smart Chain, the blockchain platform run by crypto exchange Binance.

Why is it called PancakeSwap?

It just follows the trend of decentralized finance that uses a food theme. PancakeSwap is the latest in a long line of crypto projects, including SushiSwap, Yam Finance, BakerySwap, and Kimchi Finance.

The Beginning of PancakeSwap

Quoted from duniafintech.com, PancakeSwap was first released in September 2020 on the Binance Smart Chain which was used specifically for BEP-20 tokens.

The concept that it carries is Automatic Market Maker. Whereas a user, you will trade with a pool of liquidity or user-fueled liquidity to enable crypto trading.

Namely, it contains funds deposited into the pool and then gets tokens from liquidity providers in return.

In accordance with the concept, liquidity pools are also a substitute for order books as in the abolished blockchain network.

So you can make the desired exchange and can get rewards all the time if you participate in saving coins in the pool.

PancakeSwap is part of the rising wave of DeFi services and is one of the largest DEXs on the Binance Smart Chain.

It even surpassed Uniswap several times to become the most popular DEX based on trading volume.

How PancakeSwap Works

Interested in trying PancakeSwap? Wait, don’t be rash. Let’s find out first, how it works. As stated earlier that this token exchange in PancakeSwap occurs through a pool of liquidity between token pairs.

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Now as a user, you can exchange one type of token with another without an intermediary.

While other users who stake their tokens in the liquidity pool get a share of the rewards generated by the transaction.

CAKE, PancakeSwap’s Original Token

Speaking of tokens, in PancakeSwap the token is called CAKE.

As reported by zipmex.com, CAKE is a native token from PancakeSwap which has a double function, namely as a governance token, as well as providing farming and staking services.

Users can earn CAKE through liquidity, staking, or buy it through an exchange. CAKE tokens issued to liquidity providers can be traded on the open crypto-asset market, just like any other coin.

Apart from CAKE, there is also another token called SYRUP, which allows its holders to receive 40 percent of CAKE emissions. SYRUP is not designed for sale, as it was created only to release staked CAKE.

Through PancakeSwap, you can sell or buy a number of coins into the syrup pool which provides rewards for users.

For example, you can stake CAKE, PancakeSwap’s native token, and earn more CAKE just by leaving it in Syrup Pools from time to time.

There is even an auto-stake option that will re-trade CAKE tokens at least once per hour so that you will receive more rewards.

As a game, PancakeSwap is like betting the price up to and down in a limited time range.

In addition, PancakeSwap also has a lottery feature where users can buy tickets with the lure of winning a large number of CAKE tokens.

DEX also offers a variety of rabbit-themed NFTs (Non-Fungible Tokens) for sale. There is also an Initial Farm Offering (IFO) sale that allows you to buy new coins from startup projects.

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Until March 2021, the adoption rate of CAKE tokens is increasing. Based on information obtained from CoinMarketCap, the number of CAKE tokens that have been spread in the crypto asset trading market is 125,984,870 CAKE.

PancakeSwap Advantages

PancakeSwap is one of the well-known DEX platforms, which of course has various advantages, so it is not surprising that its users have experienced a significant increase.

Following are some of the advantages of PancakeSwap:

High Adoption Rate

PancakeSwap was the spark for DeFi to introduce AMM functionality that no other project had successfully implemented before.

This certainly increases the use of PancakeSwap as a DEX and also a higher CAKE adoption rate.

In addition, the high adoption rate of CAKE is also due to the increasing adoption of the Binance Smart Chain and the CAKE token. As is common in the crypto space, crypto-asset prices can respond to adoption or at least user demand.

Minimum Transaction Fee

PancakeSwap can offer much lower transaction fees because it uses a scalable network like BSC.

In BSC, the transaction fees charged are very small when compared to the transaction fees charged on other blockchains. Besides being more efficient, BSC also facilitates faster transactions.

These two features make it easier for users to make transactions with PancakeSwap.

No Intermediaries

Such a service bypasses the centralized intermediary exchange, letting other users reap the rewards.

So, if you want to lock up tokens for a while, the rewards can be huge, especially with multiple liquidity pools and staking options.

Audited and Secured

PancakeSwap has passed the time and expense of receiving an audit from cybersecurity firm CertiK.

It has also been integrated with CertiK to receive all protections, such as Oracle Security, CertiK Shield, Deep Sea, CertiK Virtual Machines, and Trading on PancakeSwap.

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Multiple Wallets Supported by PancakeSwap

PancakeSwap has support for a number of popular wallets, including Trust Wallet, TokenPocket, WalletConnect, MathWallet, and MetaMask.

Although MetaMask is an ERC-20 wallet, it can also store BEP-20 assets when properly set up.

With the various advantages that have been mentioned above, maybe PancakeSwap could be a consideration for you to try.

But don’t forget, you must know the ins and outs of the chosen investment instrument.

As with stock investing, there are many things you should know before you start.

The Future of PancakeSwap

Launching the coinvestasi.com page, Binance Smart Chain is growing rapidly as developers take advantage of low fees and faster transactions compared to Ethereum.

In April 2021, Binance revealed that the platform had executed approximately 4.9 million transactions in a single day, or triple the number Ethereum had ever managed in a day.

PancakeSwap doesn’t have the same average daily volume level as Uniswap or SushiSwap, Ethereum’s two largest DEX heavyweights, but is already very popular given the relatively young age of the Binance Smart Chain.

If Binance’s decentralized application platform (dApp) continues to grow and attract more developers and users and Ethereum’s soaring gas costs and network congestion continue then PancakeSwap may have a stronger fight against rival exchanges in due course.

Don’t be afraid to try!

That’s the explanation about PancakeSwap that you need to know. Naturally, when you find it difficult to navigate PancakeSwap and its various features when you are just trying to get into crypto asset trading.

But don’t worry. Learning to use DEX will certainly take a lot of time, but it’s worth the huge profit opportunities that can be achieved. As long as you’re not afraid to try. OK?

In addition to learning PancakeSwap, don’t forget to also study your financial health. Is he currently in good health? Or vice versa?

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