Anna KeyTue, Nov 23, 2021 5:03 PM
PancakeSwap Review: Pros, Cons and How To Use PancakeSwap
PancakeSwap is a representative of a new generation of cryptocurrency decentralized exchanges. The platform, which began operating in September 2020. Pancake Finance provides users with the ability to quickly and reasonably cheaply execute transactions on the Binance blockchain, as well as additional earning opportunities, which we will look at in this PancakeSwap review.
The PancakeSwap token, CAKE, has a market cap of $ 4,794,952,194 and is actively traded on exchanges. The original price of the token was $ 0.19, at the time of writing the review it costs $ 20.11
Like other decentralized cryptocurrency exchanges, PancakeSwap operates autonomously and is community driven by voting. The creators of the project remain anonymous.
PancakeSwap runs on the Binance Smart Chain blockchain, which allows users to transact with BEP-20 tokens. In PancakeSwap, a trade takes place between the client and the liquidity pool. When carrying out an operation, the client pays a commission of 0.2%, which is distributed between the liquidity providers and the project budget.
Working on the platform does not require registration and verification, and is carried out using a wallet that supports Binance Smart Chain. After the transaction, the funds go directly to the user's wallet.
Below we will look at the main functionality of the exchange.
The "Farms" section allows users to earn money by farming coins. For this, LP tokens are used, which users receive for providing funds to the liquidity pool.Depending on which coins you provide, you will be issued tokens of a specific type, after which you can go to the "Farms" section and set up the farming of the desired coin. From pharming, profits will be accrued in CAKE tokens.
You can set up farming on PancakeSwap like this:
- Send funds to one of the liquidity pools through the "Trade" section, where you need to use the "Liquidity" button.
- Receive LP-tokens to send to pharming through the "Farms" section.
- Get profit from farming and withdraw it to your wallet through the "Harvest" button.
Staking coins in liquidity pools is another earning opportunity. In the "Pools'' section, you can read the terms and conditions. The peculiarity of staking on the PancakeSwap exchange is that the user needs to select one of the pools, enter a CAKE for staking, after which the profit in the tokens chosen by him will be accrued.
If any token, not yet available on the exchange for staking, receives the required number of user votes, it is automatically listed.
Staking profitability varies depending on the total amount invested in it.
Trading On PancakeSwap
To trade on PancakeSwap, you need to connect a wallet running on the Binance Smart Chain to the exchange. For example, we are using the MetaMask extension.
By default, after creating a MetaMask wallet, a connection to the Ethereum Mainnet will be established. To work with the exchange, you need to go to the Binance Smart Chain. If such a network is not in the list, then it must be added manually.To do this, in the list of networks you need to enter the data and save them, after which Binance Smart Chain will appear in the list of networks.
When working with an exchange, you need to have BNB cryptocurrency on your balance to pay transaction fees.
You need to go to the official website of the exchange and use the "Connect" button, which is located in the upper right corner of the page.
After the list of wallets appears, you need to select the one that you plan to use. In this example, MetaMask. After that, you need to confirm the connection to the exchange in the wallet with the "Next" button.
After connecting the wallet to PancakeSwap, you can proceed to performing operations with cryptocurrency.
Execution of Transactions
After connecting the wallet, you need to go to the "Trade" section and select "Exchange" in the tab that appears. On this page, you need to select the direction of exchange and indicate the number of coins. Next, click the "Swap" button and confirm the transaction through the wallet.
There is a lottery section on the PancakeSwap exchange, where a user can buy a ticket with a six-digit number and, if they match the dropped numbers, he takes a certain part of the "bank".
Predictions are a futures contract disguised as a game. The user can assume that some asset will rise in price or its price will decrease. Every five minutes, the cards are updated and winners and losers appear.
The IFO is an offer to buy new tokens. A participant can purchase them before they are listed on the exchange and full-fledged trading begins. If everything is done correctly, then after listing the participant can get a good profit, usually xx.
To take part in the IFO, you need to combine two tokens, for example, BNB and CAKE into a liquidity token, creating a CAKE – BNB LP. There are two options for selling them on the platform:
- Basic Sale. It allows everyone to take part in the amount of no more than $100. After the IFO, each user will receive a share of the allocated pool of tokens in proportion to the funds deposited.
- Unlimited Sale. This option is designed for large investors. Unlike the first option, there are no restrictions on the purchase amount. However, an additional commission is charged, which depends on the number of participants.
For many months, PancakeSwap has been working without any glitches. Decentralized cryptocurrency exchange on this platform appears to be completely safe. Besides,
the exchange was audited by the reputable cybersecurity company CertiK.
Pros Of PancakeSwap
The popularity of PancakeSwap is growing steadily – users of two categories come to the platform: people who are disappointed in the services of decentralized exchanges and those who want to buy new coins that have not yet appeared on ordinary centralized exchanges.
PancakeSwap DEX clients highlight the following platform advantages:
- Convenience of functionality.
- High level of security: when making transactions, all operations are carried out directly through the wallet.
- Lack of registration, verification and account creation procedures.
- Low fees of 0.2% per trade.
- The speed of operations.
- The ability to connect a large number of wallets to the exchange.
- Numerous earning opportunities: farming, staking, lottery, making a profit on the growth of the CAKE token rate.
- Active development of the exchange: the exchange constantly provides users with new opportunities. The plans include the introduction of margin trading, binary options, and lending.
- The voting control system allows users to choose new directions for the development of the site, accept or reject certain updates, and also choose tokens for listing.
Cons Of PancakeSwap
Objectively speaking, the exchange has no serious drawbacks, although there are potential problems inherent in decentralized exchanges as such: vulnerabilities in smart contracts, irrecoverable nature of transactions, when in case of an error it is impossible to cancel the operation and return the funds. In general, the PancakeSwap exchange is able to compete with other decentralized crypto-exchanges on the Ethereum blockchain.
How trustworthy is PancakeSwap?
PancakeSwap has audited its business operations with the help of cybersecurity company CertiK. Thanks to this, users have a trustworthy crypto exchange.
How much does PancakeSwap cost?
At the time of this writing, the CAKE token is priced at $ 19.76.
Why is PancakeSwap so expensive?
PancakeSwap uses BNB tokens to pay for gas. Therefore, in order to trade on PancakeSwap, users must have BNB in their wallets. Despite being relatively expensive, transaction fees on BSC are cheaper compared to Ethereum. PancakeSwap's transaction fee is currently approximately 0.25% of the trading amount.
Is PancakeSwap regulated?
Unlike centralized crypto exchanges that include different tokens into listing individually in accordance with regulatory restrictions, PancakeSwap allows you to list any token.