11 months after its launch, PancakeSwap has become one of the largest DeFi mining farms. According to the portal DeFi Llama , it has already beaten Uniswap in terms of total value locked in with $5.5 billion in accumulated funds.
How did PancakeSwap handle this? How can you monetize token pools and syrup CAKE? Let's find out!
What is DeFi and why is everyone talking about it?
You know well what traditional finance looks like: banks with their cumbersome procedures, credit history and low APR. If you want to borrow money, you have to pass a credit check, the result of which you never know in advance; if you want to make a deposit, the best you can count on is an interest rate slightly higher than inflation.
Decentralized financing offers the same services but with cryptocurrency. Since it is based on a permissionless blockchain, anyone with an internet connection can access it without any restrictions. DeFi services are transparent and intermediary-free, meaning no one can affect your funds in any way beyond what is written in a smart contract.
DeFi skyrocketed in 2020-2021 after the concept of farming production was introduced: the ability to obtain additional tokens as a reward for providing liquidity to a protocol. PancakeSwap is one such service – its simplicity and high profitability have attracted millions of users in less than a year.
What is PancakeSwap? How it works?
PancakeSwap is a decentralized exchange (DEX) built on the Binance Smart Chain, a blockchain launched by the Binance exchange in September 2020. As a DEX, PancakeSwap allows users to exchange between BSC-based tokens directly from their wallets at low fees.
PancakeSwap uses the Automated Market Maker model: in this exchange there is no order book where all buy and sell orders are recorded. Instead, there are liquidity pools – smart sockets where a pair of tokens are locked. For example, if a user wants to sell their BUSD and buy some CAKE tokens (a native asset of PancakeSwap), they would trade directly with a BUSD-CAKE liquid pool.
And this is where the magic begins: these liquidity pools offer users numerous earning opportunities. First, you can provide liquidity to a pool and receive a share of each exchange in it as a reward. Second, when you provide liquidity to a pool, you get LP (Liquidity Pool) tokens that represent your stake in the pool – and you can stake those tokens on farms and earn CORT (that's exactly the yield mining part of the game). Third, you can stake the earned CAKE in single currency syrup pools and get even more CAKE or other BSC based tokens.
We will take a closer look at the PancakeSwap earning process a little later.
What is PancakeSwap's roadmap?
The anonymous team at PancakeSwap asks for a better name the road you are map to-do list as they work: "as fast as we can, on the things we can." Obviously, the roadmap looks like a list like this:
CAKE staking and the basics of the NFT ecosystem are the things apart from the main features already launched on PancakeSwap. Now the team is working on an NFT-based gamification where you will be able to perform tasks to earn NFTs, borrow and lend services for BSC and LP tokens, and trade on margin to buy and sell BSC tokens with leverage.
What are the benefits of PancakeSwap?
A wide selection of assets
The most popular BSC-based tokens, along with rarer, stablecoins and multiple packaged assets, are available to exchange and provide liquidity on PancakeSwap.
Compatible with Ethereum
PancakeSwap is well prepared for users looking to migrate from Ethereum. The interface is well known to all Ethereum DEX users; it is possible to connect the same MetaMask or Trust Wallet. As for developers, Binance Smart Chain has made it easy to convert any ERC-20 token into BEP-20 format and implement it in BSC and PancakeSwap.
Low fees and fast transactions
PancakeSwap leverages the common advantages of the Binance Smart Chain: transaction fees between $ 0.04 and $ 0.2, which Ethereum users can still only dream of, and an average transaction time of 5 seconds.
Safety
PancakeSwap is non-custodial, which means that while this protocol is also traded, users' funds always remain in their wallets and the team cannot access them. Blockchain security platform CertiK audited PancakeSwap and proved it to be secure.
How can I earn with PancakeSwap?
Provide liquidity to pools
As mentioned above, users can provide liquidity to pools and get rewarded. Here's how it works: go to the page Liquidity on PancakeSwap, connect your wallet (press the button in the upper right corner of the page) and click Add Liquidity. After doing so, you will receive some LP tokens which will represent your share of this pool.
Every time a user exchanges their tokens into a pool, they leave 0.017% of their transaction volume in that pool. This money adds to the amount of LP tokens proportionally between all liquidity providers: say if you get 1 LP token LP BUSD-CAKE after providing liquidity, you will have 1.05 LP tokens after processing several swaps in the pool. When you want to get your liquidity back, you will convert LP tokens back to tokens you provided, and obviously there will be more than the original amount.
Farm LP Tokens
You can stake your LP tokens to get additional rewards with up to 190% APR. See the list of available ones farms and choose one or several based on the predicted APR and your confidence in the symbols. Provide liquidity to the selected pools and stake the LP tokens in these farms - this will earn you CAKE tokens.
Place CAKE in pools of syrup
One step further to multiply your earnings with PancakeSwap is to stake your CAKE in one of the syrup checks with one currency. It works very simply: once you lock your cake in one of the pools, you will start receiving rewards with a selected token and you can click Harvest to collect your earnings.
In the Auto CAKE pool, not only do you earn interest, but it automatically compounds daily: winnings are added to your stake and the APR increases. In other pools, you can also reinvest your interest, but this must be done manually.
What is the CAKE token price forecast?
CAKE made outstanding progress in 2021, starting at $ 0.6 in January and reaching $ 21 by August. This is even more than some of the predicted services: CoinGape expected CAKEbetween $8 and $15 in 2021 d. A solid use case and an ever-growing user base helped the token skyrocket.
Coinpedia predicts that PancakeSwap will jump to $ 60 and $ 80 by the end of 2021 and $ 150 by the end of 2022. Another prediction platform Wallet Investor gives CAKE $ 50 until August 2022 Mr.
How can I buy PancakeSwap (CAKE)?
An obvious solution for buying CAKE is PancakeSwap: if you have BSC20 BNB or BUSD based on BSC, you can get CAKE there instantly at low fees. Once you have it, you can immediately start earning more by placing a COURT in one of the syrup pools.
However, if you prefer to buy CAKE with coins or tokens other than BEP20 , ChangeNOW is at your service. Here you can buy COURT with Bitcoin, Ethereum or any of the 200+ assets of low fees in just a few minutes. No registration and KYC required.
Which wallets are best for storing CAKE?
Trusted wallet
Trust Wallet is designed by the Binance team, so it has perfect support for BEP20 tokens and the entire BSC ecosystem, including PancakeSwap. You can link this wallet to the DEX in your browser and enjoy the cropping possibilities right away.
MetaMask
MetaMask was originally designed for Ethereum, but as the DeFi domain developed, the team also embraced the Binance Smart Chain. To add BSC to MetaMask, follow this official short guide at Binance Academy – it will only take you a few minutes.
MetaMask easily connects to PancakeSwap and allows you to store your CAKE and LP tokens along with all other BSC based assets. The wallet once won the love of Ethereum fans and is now doing so with Binance Smart Chain users.
PancakeSwap: the future of DeFi and Farming
PancakeSwap is one of the platforms that runs the entire Binance Smart Chain. This DEX is one of the factors why users are actively migrating to BSC from Ethereum: low fees, large mining opportunities and compatibility with ERC20 facilitate this process. Earning with PancakeSwap is easy and millions of users are taking advantage of this opportunity.
To learn more about how decentralized exchanges work and why they are more secure than centralized ones, see this article . Here you can learn about Uniswap, the main counterpart of PancakeSwap on the Ethereum network.