ancakeSwap is a Decentralised Exchange (DEX) and Automated Market Maker (AMM) that launched on the BNB Chain in 2020 and swiftly grew to have the largest user base of any DEX in the world!
The protocol has proven to be one of the most secure decentralised exchanges, by securing over 17 security audits with large audit companies such as CertiK and by using multi-sig crypto wallets to secure their assets and liquidity.
PancakeSwap is open-source which allows anyone to look at all the codes on their smart contract, providing superior transparency to its community.
PancakeSwap is the leading Protocol on the BNBChain by achieving over $3.9B in Total Value Locked, which comes as no surprise as they have a protocol that offers so much like Staking, Perpetual Trading, Lottery, NFTs and so much more we will go through in this article!
After dominating the BNB Chain, PancakeSwap decided to launch on the Ethereum mainnet and most recently the Aptos network! Who could be next?
How Does PancakeSwap Work?
Like many other decentralised exchanges, PancakeSwap is an automated market maker (AMM), but what is an Automated Market Maker (AMM)?
Automated Market Makers are simply a type of DEX that use algorithmic money bots to make it easy for users to buy and sell crypto at any time!
In short, allows users to make swaps in a decentralised manner, as it doesn’t require permission from an individual or centralised authority.
AMMs require users to provide liquidity in pools, e.g. BNB – CAKE which in turn allows users to either buy/sell those assets whenever they like, assuming there are enough funds in the Liquidity Pool.
The Exchange is the most popular part of the protocol and where it all began. It is forever receiving upgrades and is one of the easiest interfaces to use.
If there is a crypto on the BNB Chain, then you can swap/trade it on the PancakeSwap DEX, all without having to use a Centralised Exchange (CEX).
It’s simple, complete a swap/trade in a few quick clicks and the crypto will appear in your wallet, just like that.
PancakeSwap Syrup Pool
You’re going to need syrup with those pancakes…
Staking on PancakeSwap is made very easy and profitable. There are two methods by which you can Stake the native token CAKE and earn more CAKE tokens:
Fixed-Term Staking on PancakeSwap
Using the ‘Fixed-Term Staking’ option will require locking up and staking your tokens for a fixed duration of time. The longer you lock your tokens, the higher the APR% and CAKE tokens you will receive. You can currently earn up to 48.89% APR (APR will vary) just by staking CAKE with the Fixed-Term option.
Depending on the crypto you are staking, this option can be considered the highest risk as you never know what could happen in the time that you lock up your tokens. Market conditions are extremely volatile at the time of writing.
Flexible Staking on PancakeSwap
Using the Flexible Staking option does not require users to lock up tokens and can deposit or withdraw at any time. However, be aware if you withdraw (unstake) within the first 72 hours you will be taxed with a 0.1% fee.
If you want to go with the Flexible Staking option, it is considered the safest option and you can stake the platform’s native token $CAKE and earn up to 2.28% with flexible staking, at the time of writing.
Liquid Staking on PancakeSwap
One of the biggest trends and new innovations known as Liquid Staking has been added to the PancakeSwap Protocol, allowing users to freely stake their idle assets and earn a passive income.
PancakeSwap partnered with Binance Earn to enable the Liquid Staking feature on the infamous DEX that rules the BNB Chain. Users can swap Ethereum (ETH) to Wrapped Beacon Ethereum (WBETH) on both the Ethereum network and the BNB Chain.
Liquid Staking is dominating DeFi. For those who don’t know what it is, let me break it down into one sentence. Simply, Liquid Staking is the ability to stake ETH or a certain asset without having to lock up their tokens, essentially providing them with unrestricted access to their own “locked up” assets.
So, enjoy the freedom of holding and earning from idle assets, without the stress of having to manually unlock and wait for them! Sell them in an instant whenever it suits you!
PancakeSwap Yield Farms
You can’t make pancakes without a farm…
The Yield Farm section of the protocol allows users to simultaneously secure/support PancakeSwap and earn CAKE tokens, simply by staking LP (Liquidity Pool) tokens.
Total Yield Farm APR% rewards are made up of two different APR%s:
- LP Rewards APR - earned by providing liquidity (e.g. 50% BNB - 50% CAKE)
- Farm Base Rewards APR - earned by staking the LP tokens into the Farm!
Double whammy rewards right there!
Perpetual Trading on PancakeSwap
Now unlike most decentralised exchanges, PancakeSwap released its very own Perpetual Trading platform, which allows users to leverage borrowed Crypto to perform leveraged trades of up to 100x!
There is a large variety of cryptocurrencies you can trade from such as XRP, BTC and many more popular tokens. PancakeSwap’s perpetual trading platform is similar to GMX which operates on the Avalanche and Arbitrum blockchains.
You can check out our article on GMX here.
Personally one of my favourite ideas that came to PancakeSwap, was the implementation of the Lottery! All you have to do is buy your Lottery tickets with the CAKE token and if you match X amount of numbers you will win X amount of the jackpot, which is currently over $110K!
If you are also one for trading and you can read chart patterns, then you can gamble and predict if either BNB or CAKE will go Up or Down. You can earn payouts of up to 6.63x the amount you’re betting…
PancakeSwap NFT Marketplace & Profile
Just like TraderJoe, the number 1 decentralised exchange on the Avalanche network, PancakeSwap has its very own NFT marketplace, where users can list, swap or buy NFTs!
PancakeSwap has a very unique and cool feature called the NFT Profile system! These are custom and personalised profiles which can be created by anyone. You choose your name, choose an NFT profile image and join a team! Creating a profile costs 1.5 CAKE which roughly costs $6.58 at the time of writing.
How To Buy PancakeSwap CAKE
There are two main ways to buy CAKE, but either way, you will always go through a centralised exchange (CEX). Here are the options:
Option 1- Centralised Exchange
The CAKE token is available on most of the largest centralised exchanges.
Here are some Centralised Exchanges we recommend:
- Binance - The most popular CEX in the world ($CAKE available here)
- ByBit - EARN UP TO $30K in DEPOSIT BONUSES
- BitGet - Trade on BitGet and receive 0% Deposit Cashback + $5,000 DEPOSIT BONUSES
Option 2 - DeFi Wallet & Decentralised Exchange
Firstly, you will need the Binance Smart Chain (BNB Chain) connected to your DeFi wallet like Metamask.
You can watch our step-by-step tutorials on YouTube, using these links:
You can swap CAKE tokens on the Binance Smart Chain (BNB Chain) using the PancakeSwap decentralised exchange (DEX) to perform the swap of either BNB/CAKE or BUSD/GALA for example.
There’s an average of 1 million users and 13 million trades per month. As Binance grows, we can be assured that PancakeSwap will grow right alongside.
The PancakeSwap roadmap for 2023 has seen some great implementations, as well as some extremely exciting features yet to come. Here are a few top picks from the PancakeSwap 2023 Roadmap:
- MultiChain Expansion
- Fiat Integrations
- NFT Utilities
- Platform Upgrades
- Swap & Liquidity upgrade
- And so much more…
PancakeSwap has also mentioned they will be integrating and partnering with other top protocols in the BNB Chain ecosystem. Exciting times are ahead and 2024 should be a great year for PancakeSwap.
At the time of writing, the CAKE token is hovering at a price of $1.15 with a market cap of $258M! $CAKE has seen incredible All-Time Highs of $44.18 and exceeded a market cap of over $6.8B!
PancakeSwap is the 3rd largest DEX by TVL (Total Value Locked) according to DefiLlama!