PancakeSwap, one of the most popular Binance Smart Chain yield farming projects, is very popular. PancakeSwap is more than a yield farming project. It offers many products that users can use to maximize their holdings. PancakeSwap is a strong competitor to similar projects such as Uniswap.
What is PancakeSwap?
PancakeSwap, a decentralized exchange platform (DEX), facilitates trading of BEP-20 tokens. It uses an automated market maker model (AMM), which provides liquidity for peer-to-peer trades within its protocol.
PancakeSwap matches orders directly from users of different platforms to buy or sell them in this liquidity pool. User deposits are used to supply tokens in the pool. This is called “staking”.
PancakeSwap gives token holders a share of the trading fees and liquidity provider tokens when they stake them. As an incentive, stakers will get the same asset as they provided to the liquidity pool in the form of an LP token.
It works in a similar way to how Uniswap or SushiSwap work. Its user interface is almost identical. The key difference is in the yield strategy, which anyone can use on the platform. Users can also earn CAKE tokens by staking.
CAKE token: What is it?
PancakeSwap token ($CAKE), is the native token of the platform. CAKE tokens are given to users for depositing funds onto the platform. CAKE tokens can be used to purchase other tokens in special staking pools. CAKE tokens are used primarily for community governance, where users can vote on decisions related to PancakeSwap’s direction and running.
PancakeSwap Guide: How do you start using PancakeSwap and earn CAKE tokens?
PancakeSwap’s interface is simple to use. First, you will have to visit their website at https://pancakeswap.finance/ and link your wallet there. It is possible to link it to your MetaMask or Binance Chain Wallet as well as WalletConnect and Trust Wallet.
It supports MetaMask, even though it is Ethereum-based. The platform is built on top the Binance Smart Chain (BSC), allowing interoperability among Ethereum-based wallets.
There are two options on the platform: you can swap tokens or provide liquidity in the “pools” section. You can also start farming if you check out other sections.
CAKE tokens can be traded on the platform. To earn CAKE token rewards, you must first supply liquidity to PancakeSwap. These tokens can be resold to PancakeSwap and you will receive more. Users can also participate in liquidity pools to farm additional tokens.
Read more: Guide to Using PancakeSwap to Yield Farm
The Syrup pools allow project owners to launch their tokens. They can also commit a portion of the tokens they own and distribute them to CAKE owners. The Syrup pool will support two types of projects: Core and Community.
The core projects are those which have been approved by PancakeSwap. CAKE holders have voted for community projects in governance decisions. Anyone can still distribute tokens to CAKE holders via the Syrup pool. Only projects that receive the votes of the community are eligible to be listed on this platform’s interface.
Trading fees are also charged by DEXs that use the AMM model. Participants in liquidity pools are eligible for LP token rewards, as well as the accumulated trading fees.
PancakeSwap users pay 0.2% in trading fees. These fees include 0.17% that is redistributed among liquidity providers and the remaining 0.03% that is allocated to the PancakeSwap Treasury for burning.
The distribution schedule for the platform can be modified by stakers as needed, since it is decentralized.
Users can also join the CAKE lottery. You can purchase one ticket for 10 CAKEs and it will last 6 hours. The ticket will generate a randomly generated four-digit combination between 1 and 14.
If the ticket numbers of the winning tickets match the four winning numbers, the winner can take home up to 50% of the total lottery pool. Even if your numbers are in the same place as those on the winning ticket, there are still rewards.
Initial Farm Offerings (IFOs)
PancakeSwap launched Initial Farm Offerings (IFO), a platform that helps tokens to open up opportunities for yield farming. Users can use their LP tokens for this purpose. The IFO will ask those who are launching their tokens about their project, such as the current stage of development, their use case, distribution plan, smart contract audits, expected value, and the reason for the fundraising.
Is PancakeSwap safe?
CertiK, one of the most reputable auditors in this field, has audited PancakeSwap. Using these platforms does come with its own set of risks, such as bugs, which could result in the loss of funds.
There are many yield farming projects out there today, so it can be hard to know where to concentrate your efforts. It is important to consider more than the APY when choosing a platform. PancakeSwap appears to be a strong competitor for some of the most successful yield farming protocols currently in use.
The platform was built on top of Binance Smart Chain. This means it is faster than other blockchain networks in the space. It features around 3-5 second block times and their Proof-of Stake model. PancakeSwap offers other lucrative opportunities. Users can participate in lotteries, receive NFTs and launch fundraising rounds via IFOs. These features are not available in many other popular yield-farming projects.