In this PancakeSwap review, we will take an in-depth look at how pancakeSwap works, its key features, and why it has become such an important cog in the DeFi machine, and finally pancakeswap safety review?
PancakeSwap is a new decentralized exchange (DEX) and automated market maker (AMM) based on the Binance smartchain. It was launched in September 2020 and has attracted many new users from the crypto community, mainly due to its unique products such as high APYs, revenue farms, lotteries, and more. It has also become an alternative to other DEXs and also centralized exchanges due to its extremely low network fees, which are usually just pennies per transaction.
The founders and developers of the exchange are unknown, and questions about their identity continue to arise. The exchange appears to have close ties to Binance, as Binance is actively promoting it. The controlling token of PancakeSwap is CAKE, which can be used for betting, trading, attending events, etc.
PancakeSwap Protocol Review
Pancakeswap is an automated market maker (AMM) that works with liquidity pools, not with tha traditional order book method. Users contribute cryptocurrencies to the respective liquidity pools and receive LP (Liquidity Pool) tokens.
Users who provide liquidity for DEX to operate are called liquidity providers. To become a liquidity provider, a user must contribute a coin in the form of a 1:1 pair of two tokens available in the liquidity pools. For example, CAKE-BNB is one of the pairs whose liquidity pool is active on Pancakeswap. After making a deposit, the system will issue the corresponding LP-token CAKE-BNB.
The LP-tokens received by the user represent the user’s share of his deposit in the liquidity pool. These tokens must be returned to the exchange when the deposited tokens are returned.
Every time a trader makes a trade on the exchange, he pays 0.25% transaction fee, of which 0.17% is added to the liquidity pool as remuneration to liquidity providers. In addition, LP tokens can be used in gambling on CAKE farms to earn higher profits while earning transaction fees.
PancakeSwap Features Review
Exchange
PancakeSwap is an exchange, albeit a decentralized one, and the most basic function it supports is the exchange of BEP-20 tokens. LP tokens are transferred to liquidity providers who facilitate the exchange of other BEP tokens. This is very similar to a cryptocurrency exchange. PancakeSwap is designed with speed and security in mind, so it provides a seamless exchange.
Farming
Users can earn rewards when they place their Liquidity Provider (LP) tokens on yield farms. These rewards are added to the returns generated by the trading fees. Each time users place LP tokens on the numerous yield farms, the rewards are paid out in CAKE tokens.
Keep in mind that yield farms offer better rewards than syruppools, but also carry the risk of volatile loss, which is addressed in Pancakeswap’s restrictions.
The farm can only accept its own exact LP tokens. For example, the CAKE-LTC farm will only accept CAKE-LTC LP tokens.
Stakes
Not all cryptocurrency traders are experts in trading LP tokens and making profits. For those who are new to the field, betting seems to be the best option. At PancakeSwap, you can bet CAKE coins into SYRUP pools to earn even more rewards.
The best part is that these rewards aren’t just in the form of CAKE coins anymore. Other BEP tokens are available as well. Once you have decided to cash out the rewards, you need to harvest the rewards. Betting can be compared to farming, but with cryptocurrency betting, you lock in your investment for a certain period of time. Once you have staked your CAKE, you can sit back and earn passive income.
Pancakeswap NFT
NFT stands for Non-fungible Token. In keeping with the gamification principle, PancakeSwap allows users to earn special NFTs that can then be used for trading and betting. However, some people prefer to simply collect these NFTs. Binance has developed a special protocol that makes generating NFTs much easier than before.
Pancakeswap Lottery
This is another way to make money on PancakeSwap. The platform runs four lotteries per day, each lasting six hours. To participate in the lottery, you need to buy a ticket on CAKE. If you win, you can even get NFT as a reward.
PancakeSwap has another lottery called Pottery where you can deposit CAKE for ten weeks and get a chance to win the pot while earning income.
Initial Farm Offering (IFO) :
Pancakeswap allows users to buy tokens from early-stage startups built on Binance’s smart chain as part of the IFO. Users must provide cash to the CAKE-BNB pool and receive LP CAKE-BNB tokens, which are used to purchase tokens used in the IFO.
To participate in the IFO, the user must have a Pancakeswap profile. The profile ensures the security of the IFO and makes it fair for all participants. Half of the funds (CAKE tokens) are burned after the process, which reduces inflation and makes CAKE a deflationary asset. Visit Pancakeswap’s IFO page to participate in an IFO event.
PancakeSwap Token Review
Please enter Coingecko Free Api Key to get this plugin worksThe CAKE token is PancakeSwap’s proprietary token and is used as a utility token in the PancakeSwap ecosystem. CAKE is a deflationary token designed to provide liquidity to the PancakeSwap platform, and its holders benefit from transaction fees and liquidity pool rewards.
Supported Countries And Cryptocurrencies
Since PancakeSwap is a decentralized exchange, it can be used by anyone around the world. However, if users want to use the bridge to migrate Ethereum tokens to Binance’s Smart Chain Network, US citizens are currently unable to do so and must use a VPN.
PancakeSwap currently supports over 100 different BEP-20 tokens, which are essentially versions of ERC-20 and other popular cryptocurrencies. The list is growing as the expansion continues.
Conclusion
Overall, PancakeSwap has established itself as an attractive alternative to Uniswap, SushiSwap and other competitors. PancakeSwap takes advantage of Binance Smart Chain’s extremely low transaction fees and continues to introduce creative breakfast ideas.
Below are some of our pros and cons of this exchange:
Pros
- Convenience for novice users
- Fast and cheap transactions
- Numerous opportunities to earn cryptocurrencies.
- No KYC required
- Browser Wallet Extension
Cons
- Lack of mobile application
- No possibility to deposit fiat money into the account
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