How to use PancakeSwap – Guide
PancakeSwap has become the most famous decentralized exchange beating Uniswap. Here's a complete guide on how to use Pancakeswap.
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PancakeSwap has become the most famous decentralized exchange. It managed to compete with Uniswap for quite a while. The platform works on top of the Binance Smart Chain which means there are fewer fees and it’s faster. In this article, we’re going to go over how to swap tokens on Pancakeswap.
What is a Decentralized Exchange (DEX)?
Decentralized exchanges are exchange platforms in the decentralized finance sector where traders carry out activities. These platforms allow traders to carry out their transactions on a peer-to-peer basis. This means that traders are eligible to trade without the intervention of the platform or another third party. However, for transactions to be guided, traders must adhere strictly to the rules of the smart contracts of every platform. One of the best features of decentralized exchanges is the anonymity that it provides users.
What is PancakeSwap Crypto?
PancakeSwap is a Binance Smart Chain-based decentralized exchange that was launched in September 2020. Traders in the platform can trade and swap any token of their choice using its liquidity pools. Like most decentralized exchanges in the sector, traders can effectively carry out their activities without the need for an intermediary.
PancakeSwap uses an Automated Market Marker, which relies on the usage of smart contracts to carry out transactions. PancakeSwap owns its liquidity pools called SYRUP pools, while its native token is called CAKE. The decentralized exchange is the go-to for traders who intend to enter the yield farming or staking business. Presently, PancakeSwap is ranked #4 on CoinMarketCap with a daily trading volume of $230 million.
What do you need to start using PancakeSwap?
To connect to PancakeSwap, you will need one of the following browser extensions: Metamask, Trustwallet, MathWallet, TokenPocket, WalletConnect, or the official Binance Chain Wallet. For simplicity’s sake, we will be utilizing Metamask as it can be connected to a variety of chains.
In order to connect your Metamask to the Binance Smart Chain, you can check out this article here.
Once you have connected to CakeSwap through your Metamask, you will be able to freely navigate the website.
Pancakeswap Features
PancakeSwap offers a variety of features. On Farms, you can stake LP tokens that payout in CAKE up to 550% APY on some of them. Since PancakeSwap utilizes BSC, approving and staking will cost less than $1 total.
Additionally, the platform offers a lottery option where you can buy tickets using CAKE and win big pots.
The pot can be huge as it depends on the number of tickets users bought. The next most important feature of PancakeSwap is the IFOs (Initial Farm Offerings) which allows users to farm new tokens through CAKE.
Most recently, PancakeSwap introduced collectibles in the form of NFTs that players can earn through a variety of tasks. The total supply of CAKE is infinite but the team has put in place several mechanisms to reduce its inflationary nature.
For instance, users can vote to reduce the emission of CAKE per blow, but there are also regular token burns. For instance, 10% of the CAKE spent on lottery tickets burns, similarly, 100% of the CAKE raised in IFOs also burns, and about 9.09% of the CAKE in farms, also eventually burns.
Lastly, but not least important, PancakeSwap is a decentralized exchange, which means that you can swap tokens easily through an Automated Market Maker (AMM).
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