What is PancakeSwap and how does it work?

PancakeSwap is nothing less than the world’s fifth-largest DEX exchange by trading volume. Here, you can earn quickly and reliably, with an easy interface and intuitive navigation. It boasts of very fast transaction speed and commission below the plinth and holds strong growth and stability since its inception.

Binance continues to invest in the platform, which speaks to its importance and raises its tokens in value. The system offers the widest range of earning opportunities, up to gaming. It’s a uniquely decentralized exchange with unexpected functionality and fantastic earning opportunities.

What is PancakeSwap

PancakeSwap offers opportunities to buy, sell and earn tokens. To start working on the exchange, a Web3 wallet must be connected. To do this, the user must go to the official site and click on the Connect icon. This will open a window where you must select a wallet.

The following options are available: 

• MetaMask;
• MathWallet;
• TokenPocket;
• WalletConnect;
• TrustWallet;
• SafePal Wallet and Coin98 Wallet. 
• Binance Chain Wallet;

Next, you just need to log in.

More than 1 thousand trading pairs are available in PancakeSwap. When exchanging tokens, users pay 0.25% of each trade, of which 0.03% goes to fund growth, 0.05% is burned and 0.17% is distributed among liquidity providers. This is a very small commission.

History Of PancakeSwap

The platform was launched on 20 September 2020 by unknown developers, backed by Binance. Early last year, PancakeSwap became one of the largest DeFi exchanges by trading volume, and in March it surpassed Uniswap in total locked-in funds (TVL) – $4 billion versus $3.73 billion. It has its own Cake token, which Binance invests in, thus supporting its value growth. PancakeSwap has more than 400,000 active users per day.

Interesting things about DEX

• A Decentralised Exchange (DEX) is a crypto-asset trading application in which exchanges and other transactions take place using smart contracts rather than a centralised trading system.
• The fundamental difference between DEX and centralised exchanges is that they do not hold user funds and do not control transactions. Funds are transferred directly from the user’s wallet, which the user connects to the platform. Decentralised exchanges also have no user verification procedure.
• Decentralised exchanges have become a crucial element of the field of decentralised finance (DeFi). As of mid-2022, there are more than 200 DEXs running on dozens of blockchains.
• Cryptocurrency trading was originally centralised. The first decentralised exchange appeared in 2014, called NXT Asset Exchange. Similar projects, including Counterparty DEX and Block DX, appeared at the same time, but they did not attract much attention.
• The real popularity of decentralised exchanges has come from Automated Market Maker (AMM) technology. Instead of a traditional order book, it uses so-called liquidity pools of asset pairs, and prices are calculated according to a mathematical formula based on their ratio in the pool. This allows for a decentralised architecture and guarantees on-chain transactions via smart contracts that are comparable to centralised venues in terms of execution speed.
• AMM technology was first introduced by the Bancor project. However, the decentralised exchange Uniswap, launched in 2018 on the Ethereum blockchain, has become truly popular. Vitalik Buterin supported the project in its development.
• The model has subsequently become mainstream for decentralised exchanges and has been copied for applications in other networks. AMM-DEX also works in Solana, Cosmos, Terra and other ecosystems.

How does PancakeSwap work?

On the platform, you can trade, exchange, and make money on staking and farming. You can also become a liquidity provider and participant in a binary option. This is a new option that allows you to make money by predicting the BNB/USDT exchange rate. It is essentially the counterpart to binary options with a 5 minute round. They are very risky as it is extremely difficult to predict price movements in such a short period. There are lotteries, raffles and team competitions also.

The PancakeSwap exchange

BNB is needed to buy and trade tokens on the exchange. They can be bought immediately on PancakeSwap or on Binance and then transferred to a wallet. Trading takes place in the Trade section of the Exchange tab. 

Farming and staking on PancakeSwap

Under Trade, you can become a liquidity provider by receiving LP tokens. To do this, click Trade, then Liquidity and Add Liquidity. This will bring up a window where you will have to select two assets to add to the respective liquidity pool. You can invest LP tokens in one of the farms to earn money. To do this, go to Farms and select the farm corresponding to your LP tokens under Liquidity. For example, in the case of the CAKE-BNB LP pool, select farm CAKE-BNB. This will start farming with the reward in CAKE token. You can get it at any time by pressing the Harvest button.

Pools. This section allows you to invest CAKE tokens in “syrup” pools and make up money by staking. The reward for staking will be the currency of the selected pool. The reward can be collected at any time by paying a transaction fee.

Using PancakeSwap

Using PancakeSwap is very easy. The interface is intuitive and bright and very live to use.

Is PancakeSwap safe?

In the decentralised world, everything is relatively secure. What is clear is that PancakeSwap is not a scam, has no obvious vulnerabilities, and has passed the maximum number of audits. The exchange has been audited by CertiK and is integrated with all its security tools: Security Oracle, CertiKShield DeepSEA and The CertiK Virtual Machine. The site has also passed the Slowmist security audit. 

Here, from this summer. Binance’s venture and incubation arm has announced a strategic investment in decentralised exchange PancakeSwap. And Binance, if it’s investing, is thinking.

.@BinanceLabs has invested in @PancakeSwap's utility and governance token, $CAKE.

This investment will provide technology development, marketing and community support as well as Web3 enterprise solutions.https://t.co/JHO2P9k9rH

— Binance (@binance) June 6, 2022