PancakeSwap is a Binance Smart Chain-based DEX. This Binance Smart Chain is being launched by anonymous devs. With love for breakfast foods and rabbits as well.
PancakeSwap somewhat looks like the SushiSwap of Ethereum (community governance and this is the power to farm liquidity provider tokens).
However, it incorporates so many other features too that allow you to earn rewards.
Amazingly, PancakeSwap is the creation of Binance. And Binance is a centralized crypto exchange that is known for being the biggest in the world.
Using PankcakeSwap, Binance is principally competing against two recognized cryptocurrency establishments, which are Uniswap and Ethereum.
The Binance Smart Chain also allows users to switch between cryptocurrency assets by just clicking into user-generated liquidity pools.
PancakeSwap vs. Uniswap vs. SushiSwap
In the cryptocurrency landscape of today, there are 3 main decentralized exchanges that are dominating the roost. And they include:
This Binance Smart Chain is a Uniswap clone that is being developed on BSC to send swift. And lower-priced trades by making use of the BEP – 20 tokens and the BSC <–> ETH bridge.
SushiSwap is a community-governed Uniswap fork that has progressed into a DeFi hub providing farming. Token swaps, and crypto lending/borrowing as well.
Uniswap is the main DeFi liquidity protocol that is being developed on Ethereum. It is the standard of today for easy cryptocurrency trading. By making use of the ERC – 20 tokens and mainly ETH pairs.
PancakeSwap makes use of a self-operating market maker (AMM) model. And this literally means that while trading digital assets on PancakeSwap. There is no order book where you are being paired with another person.
You trade a liquidity pool instead.
The pools are being packed with some other users’ funds. They pay them into the pool, collecting liquidity provider (LP) tokens in return. They can as well make use of the tokens to claim their share again. Including a segment of the trading fees.
So, what am I saying in summary?. All I’m saying in essence is that you can actually trade BEP-20 tokens, or include liquidity and receive rewards.
The CAKE token price revived 2021 beginning. And CAKE has a token supply of more than 118 million.
Supported wallets of the Binance Smart Chain
To use PancakeSwap, you will have to make use of a PancakeSwap supported wallet. The one that is being attached to the Binance Smart Chain.
And the Wallets supported by PancakeSwap include:
- Binance Chain Wallet
However, take note that if you are using the Metamask wallet. You will have to connect the wallet manually to the Binance Smart Chain
The PancakeSwap trading fees are 0.2%. And this is shared between liquidity providers which is 0.17% and 0.03%, the PancakeSwap Treasury.
There are no order books so as there are withdrawal fees or even deposits. However, you will have to pay transaction fees for communicating with the Binance Smart Chain.
Currently, the transaction fees are minimal, particularly compared to the gas fees on Ethereum.
Is PancakeSwap Safe?
PancakeSwap has been scrutinized by CertiK, but paying funds into a smart doesn’t come to any risk. And that means that there can be bugs even after being scrutinized.
As a matter of fact, an exploit was seen in the SYRUP smart contract. And this moved PancakeSwap to stop their SYRUP pools.
All I’m saying in essence is that even with scrutinization. It still happens to be that the contracts can be compromised also.
How to Use PancakeSwap?
Follow the steps below to see how to use PancakeSwap:
- Visit “www.pancake.finance”.
- Now that you are on the page, connect your wallet.
- To connect your wallet, on the page, click on “Connect” at the top right side of the page.
- Now select the wallet you would like to connect with. From the likes of:
-Binance Chain wallet
- Before you connect to any of these wallets. Ensure you have some BNB in your wallet to be able to pay for the transaction fees.
- Next is to click on the dropdown menus to select the tokens you want to swap. And enter the amount as well. The base token is BNB by default.
- Now click on “Swap” to be able to begin the transaction.
- Finally, preview and confirm the transaction from your wallet.