PancakeSwap (CAKE) Review: Everything About CAKE Explained
PancakeSwap is a DEX (decentralized exchange) powered by the Binance Smart Chain. The exchanges facilitate the swapping of one cryptocurrency with another crypto asset. Users can swap BEP-20 tokens on PancakeSwap quickly and safely.
PancakeSwap operates like Uniswap as both exchanges have many similarities. They’re decentralized and enables trading plus liquidity pools. The exchange is the largest decentralized application on Binance Smart Chain. Many people consider PancakeSwap as futuristic with a lot of opportunities to offer.
Presently, the total value locked in PancakeSwap is up to $4,720,303,152. This is a clear indication that many DeFi lovers are adopting and utilizing the exchange. Right now, the exchange is almost competing with top players such as SushiSwap and Uniswap.
Introducing the Binance Smart Chain
The Binance Smart Chain was launched on the 20th of September 2020. It is a blockchain that runs side by side with the main Binance Chain. It supports smart contracts and also works with the EVM (Ethereum Virtual Machine).
The Binance Smart Chain utilizes many Ethereum DApps and tools. Presently, many investors use it for staking and yield farming. However, many people wonder if the reason for the exponential growth is because it was accepted and promoted by the “Binance Accelerator Fund.”
The aim of developing the BSC was to introduce smart contracts in the Binance ecosystem while still maintaining the Binance Chain high throughout.
This is why both chains run side by side, although BSC can run on its own even if the main Binance Chain shuts down. Other names for BSC include “Off-chain” and “layer-two” scalability solutions.
One important thing to note about BSC is that it is faster than Binance Chain and the transaction fees are lower also. Moreover, it is more advanced and delivers ultra-high performance, exemplified by its capacity to produce blocks in a 3-second interval.
Another important reason for the Binance layer2 is to enable developers to create staking mechanisms and smart contracts. To achieve this, developers create a Binance version of ERC-20 called BEP-20. But users of BEP-20 tokens stand a chance to gain more from trading the tokens.
This is because the tokens are on the Chain, and as such, the transaction fees are lower, and there are other opportunities to explore.
What are PancakeSwap Contributions to the Crypto Market?
The crypto market is never free from issues and difficulties for traders and investors. Amongst the many challenges of the industry, security concerns have been more prominent. That’s why many investors and traders often lose their earnings or funds to cybercriminals.
But the entrance of PancakeSwap has helped to reduce the security concerns. The Chain is committed to its security, and as such, it’s often compared to big shots like Uniswap in terms of security.
Another contribution of PancakeSwap concerns centralization, which has become a major issue in the crypto market. DeFi revolution started on the Ethereum blockchain, and that’s why 90% of the tokens in the market are based on ERC-20.
Although, when the ICO rush started in 2017, everything changed until the emergence of Decentralized finance. As the new entrant launched on the Ethereum blockchain, the network recorded another boost in its users and supporters.
But all these revolutions and newcomers seemingly made the market attractive and profitable; there have been some salient problems permeating the existence and operations of the crypto market. As soon as a newcomer joins the community, he/she will notice that everything is not as it seems from outside.
For instance, the scalability issues of Ethereum have not been fully resolved. The network is still using the Proof-of-Work concept, and that’s why issues keep arising. For instance, transaction delays are a constant challenge for those who use the network.
Also, increased transaction fees have been discouraging many investors from using the network. Anytime the network becomes congested, these two issues become a challenge for the users.
The reason for the rising transaction fees on Ethereum is because the network uses GAS as an incentive for the miners. With GAS, network nodes execute Ethereum Virtual Machines faster.
However, due to the wide adoption of the blockchain by several projects, the network is often congested, and transaction fees keep rising. In 2021, GAS costs $20, and trades on Ethereum now take 5 minutes instead of seconds to be completed.
Benefits of Using PancakeSwap
One of the good things about decentralized exchange is that it eliminates the challenges the crypto community faces in completing transactions.
Most of the issues are on the Ethereum network, but with the Binance Smart Chain, it’s easier to streamline the actions and provide a cost-effective platform for users. This is why the blockchain has won the hearts of many users and is therefore competing with the more traditional exchanges.
Other PancakeSwap benefits include the following;
- Access to new tokens
PancakeSwap exchange offers users the opportunity to select the tokens they want to swap. Users also can swap new tokens and transfer BUSD, USDT, ETH, and BTC from the ETH chain to the Binance Smart Chain through the deposit feature of the network.
Moreover, using the decentralized exchange opens up doors to the most popular projects which everyone wishes to access. A user can select amongst BEP-20 tokens and other projects that are not easily accessed.
- Blockchain Interconnectivity
PancakeSwap facilitates blockchain interconnectivity whereby one blockchain can connect to another blockchain by using some features from each other. For instance, PancakeSwap developer designed the network to integrate many wallets used by investors.
So, on the decentralized exchange, you can use MetaMask, MathWallet, Trust Wallet, WalletConnect, TokenPocket, etc. PancakeSwap developers streamlined the process because they knew that many of the users would come from the Ethereum network.
- Ease of Usage
It is no longer news that PancakeSwap offers an easy-to-use interface. Many users are ecstatic about it because the interface is as simple as other respected DEX projects in the industry. Users don’t need to be experienced before using the platform.
The trading functionalities are easy to understand and completed for profits. Also, on the exchange, a user can loan his/her digital assets to contribute to liquidity pools. Afterward, the rewards of liquidity tokens from the loan can be used in staking to make more profits.
- Cheaper transactions
The transaction fees on PancakeSwap are lower than other exchanges. Since the network doesn’t use GAS prices to complete transactions, users can conduct their trades at a lower fee than what’s attainable on SushiSwap and Uniswap.
- Faster transactions
Since the network is built on the Binance Smart Chain, transactions are faster and completed within five seconds. With this speed, investors are sure of more profits.
- Multiple income streams
There are many ways to make profits on PancakeSwap. Users can engage in staking activities, trade, and issue non-fungible tokens. All these add up to more than one way of making profits.
- PancakeSwap is secure and private
Anyone looking to trade privately can use the exchange because there’s no requirement for KYC/AML registration. All it needs is for users to link the supported wallet and start trading. This is very good for privacy-savvy users who don’t want to be compromised by cybercriminals. Also, the exchange is secure because it doesn’t hold users’ assets on its platform.
Also, the exchange engaged CertiK to conduct an audit on the network. After the audit, CertiK confirmed the exchange was secured and allowed them to add its CertiK Shield, CertiK security Oracle, Virtual Machine functionalities, and DeepSEA.
- Uses Deflationary Protocols
The protocols keep the value of PancakeSwap tokens stable. The protocols include many CAKE burns. For example, the burning of 100% of its native token raised during IFO and 10% profits from its lottery and farmed CAKE.
Outstanding Features of PancakeSwap
PancakeSwap has several features that facilitate its processes. It works like an AMM (automated market maker) that doesn’t need help matching buyers & sellers. But it uses different algorithms and liquidity pools to match the two parties.
Notable features of PancakeSwap includes:
- Liquidity pools
On the exchange, users can create liquidity pools to earn tokens. The token’s value usually rises as the pool’s value rises as well. So, users don’t need to trade to make profits. They can stake their tokens on any of the 60 plus pools on the exchange.
- SYRUP pools
These are pools on the exchange that offers higher rewards. Also, a user can get rewards in other tokens such as LINA, SWINGBY, UST, etc., when they stake in SYRUP liquidity pools. Many of the pools offer up to 43.33% to 275.12% APY.
PancakeSwap provides an easy-to-use decentralized exchange that gives new traders the features they need to trade effectively. Also, there are many token options for users, and trades are faster too.
- Liquidity Pool Tokens
Every user who contributes to liquidity pools get rewards for participating. They own a percentage of the trading fees collected on the network.
PancakeSwap users can engage in staking to earn rewards in tokens. Staking on the platform is done with CAKE, and it’s best for new entrants into the market. PancakeSwap staking doesn’t require skills or close monitoring by users. Rewards come to every user according to the amount and time of their stakes.
- Yield Farming
Yield farming pools exist on the DEx. Users utilize smart contracts to lend their tokens for rewards.
How to Buy PancakeSwap Coin
There are multiple ways to get CAKE. The first way is to stake your CAKE to gain more of the coin. With the token, you can contribute to the SYRUP pools. CAKE is found on Binance Smart Chain and available on Binance exchange.
Other ways of getting more CAKE are:
- IFO (Initial Farm Offering)
During IFOs, users will get access to new tokens by holding LP tokens from the PancakeSwap supported pools. This is different from ICOs as it is often more decentralized and democratic.
There are four lotteries on the platform every day. Users who have 10 plus CAKE can join the lottery. Rewards of the lotteries can be CAKE or NFTs paid immediately to winners.
- Non-Fungible Tokens
Users can trade and stake NFTs on PancakeSwap. There are even special rewards in NFTs for winners of the PancakeSwap lottery. With the launch of the BEP-721 protocol, PancakeSwap makes it easier for developers to create and launch NFTs & FNFTs.
The exchange has a treasury that funds its development. Up to 0.03% of trading fees are sent to the treasury. The protocol is also responsible for executing token burns to maintain the value of its tokens.
Future of PancakeSwap
The decentralized exchange comes with a unique set of features to eliminate certain challenges in the crypto industry. It offers speed of transaction and lowers transaction fees.
Moreover, the interface is user-friendly, and there are multiple ways to make profits on the network. With all these features and benefits, it’s easy to conclude that the future is bright for the exchange.