In this article, we have prepared a PancakeSwap Guide for you. We will provide information about the PancakeSwap Exchange and its use.
Another food-themed DeFi protocol? Yes, it exactly is. PancakeSwap is a Binance Smart Chain based DEX made available by anonymous developers with a special interest in breakfast buns and rabbits.
PancakeSwap is similar to Ethereum’s SushiSwap in some ways. (community governance, ability to farm liquidity provider tokens), But this platform also has many other features that allow you to earn rewards.
The food-themed farming frenzy has taken over the participants of the crypto world for months. With this new flow of DeFi protocol, we have witnessed the emergence of a large number of platforms that allow users to earn from protocol tokens by staking their funds.
The vast majority of these events are concentrated on the Ethereum blockchain. As one of the oldest blockchains to support smart contracts, Ethereum has a growing community of users and developers, as well as a wealth of tools for developing powerful decentralized applications.
In this article, we will review PancakeSwap, a decentralized exchange built on Binance Smart Chain (BSC).
What is PancakeSwap?
PancakeSwap is a decentralized exchange for exchanging BEP-20 tokens.
Are you familiar with Uniswap or SushiSwap? Then you will have no trouble understanding PancakeSwap, which is quite similar to these platforms in terms of its basic design.
PancakeSwap uses the automatic market maker (AMM) model. This means that although you can buy and sell digital assets on the platform, there is no order book where your orders are matched with orders from other users. Instead, you trade against a liquidity pool.
Liquidity pools are filled with funds from other users. These users earn liquidity provider (or LP) tokens in exchange for depositing their funds into the pool. They can use these earned tokens to claim both their share and a portion of the proceeds from transaction fees.
In short, you can buy and sell BEP-20 tokens or earn rewards by adding liquidity. You can also take advantage of other features that we will talk about in the following sections.
There are different types of LP tokens. For example, if you add BUSD and BNB to the pool, you will receive BUSD-BNB LP tokens in return. If you add BETH and ETH, you will have BET-ETH LP tokens.
Farming and staking on PancakeSwap
There is more! PancakeSwap also allows you to farm the governance token, CAKE.
By depositing your LP tokens while farming, you can lock yourself into a process that rewards you with CAKE. Which LP tokens can you deposit? This list is quite long, but you can see some of the most popular LP tokens below:
- CAKE – BNB LP
- BUSD – BNB LP
- BETH – ETH LP
- USDT – BUSD LP
- USDC – BUSD LP
- DAI – BUSD LP
- LINK – BUSD LP
- TWT – BNB LP
But the rewards don’t end there! You can earn even more by staking your CAKE tokens in SYRUP pools.
If you received LP tokens by depositing funds and used these tokens to farm CAKE, you can then stake your CAKE and earn from other tokens via special staking pools.
The largest SYRUP pool is for CAKE. Here you can earn even more CAKE by staking your CAKE! But there are many other tokens you can earn by staking CAKE, so it’s worth following the SYRUP pool page.
If you visit pancakeswap.finance, you may find that many features are not available until you Unlock the Wallet. Click the “Unlock Wallet” button and several options will appear: MetaMask, Trust Wallet, WalletConnect, Binance Chain Wallet and more.
“But wait, isn’t MetaMask an Ethereum wallet?” We seem to hear you say.
Yes it is, but Binance Smart Chain’s architecture allows you to use MetaMask to interact with BSC-based DApps. If you choose to use MetaMask, we recommend that you first read our guide on Connecting MetaMask to Binance Smart Chain.
After making your choice, you can unlock your wallet to view additional information. You will find that different LP tokens promise different returns. So, how can you add liquidity?
Again, if you’ve used any AMM previously, then you know the drill. To farm CAKE, you need to first add liquidity to the exchange.
Navigate to Trade on the sidebar on the left, then click on Liquidity, hit Add Liquidity, and select the token pair that you want to deposit. Also, make sure you know about impermanent loss before adding liquidity to a pool.
Now that you’ve received your LP tokens, it’s time to earn CAKE by staking them. Go to the Farms tab and choose the option that matches your LP tokens.
Similar to ERC-20 tokens, you must confirm the movement of BEP-20 tokens – so the contract can withdraw the tokens for you. When you click on Approve Contract, a pop-up window will ask you to confirm the transaction and show the transaction fee.
After the transaction is confirmed, select the amount you want to stake and confirm. You can leave this page and return to the page at any time to see how much CAKE you have earned. If you want to withdraw your earned rewards, click Harvest and confirm the action.
After you receive your CAKEs, you can stake them in SYRUP pools. By clicking the Pools tab, you can see the pools where you can stake your CAKEs.
SYRUP pools – You can earn new tokens by staking CAKE.
Here, too, you need to confirm the withdrawal of the tokens. To do this, click the Approve CAKE button. After confirming, select the amount of CAKE you want to stake.
With the CAKEs you stake, you will start to passively earn from the pool’s prize token. If you want to withdraw the rewards you have won, click Harvest.
Earning passive income is great, but what else can you do with your CAKEs? You can enter a sweepstakes on PancakeSwap.
Try your luck in the PancakeSwap lottery.
Each lottery session lasts 6 hours. A ticket is 10 CAKE, and the ticket contains four random numbers that are combinations of numbers 1-14 (for example, 12-8-4-3). To win the grand prize (50% of the entire raffle pool), the numbers on your ticket and their order must match the winning ticket.
Don’t worry if you don’t get all four numbers. If two or more numbers on your ticket are the same and in the same rank as the winning ticket, you can still win a prize.
There are no limits to what you can do with PancakeSwap! You can also earn special NFTs.
You can earn from the cutest NFTs in BSC.
If you are selected as the winner of an NFT, you can sell that NFT for the CAKE it represents or keep it in your wallet as a collectible.
How can you participate in the draw? For a chance to win, you must be registered and the winners are chosen at random. Do not forget to follow the NFT page in order not to miss new opportunities.
Teams & profiles
Are you interested in gamifications? If your answer is yes, you can browse teams and profiles. Here you can create a profile to share your stats and join a team to compete for team achievements!
Initial Farm Offerings (IFO) are a way to distribute a newly released token to users by leveraging the power of yield farming. On PancakeSwap, you can do this by depositing LP tokens from a supported pool and gaining access to a newly released token sale.
You can see the active IFOs on PancakeSwap on the IFO page.
Is PancakeSwap safe?
PancakeSwap has been audited by CertiK.
So does that mean it’s perfectly safe to use PancakeSwap? No. Investing funds in smart contracts always carries a risk of software bugs, even for audited and reputable projects. You should never bet more than you can afford to lose.
PancakeSwap is one of the largest AMM projects in Binance Smart Chain (BSC) and has some innovative features.
Ethereum may have kicked off the DeFi trend, but initiatives like PancakeSwap show that the wave of innovation will spread to other chains.
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If you are having problems with your exchange, you can click here and buy safely by registering! Plus, you pay a lower commission fee!