Pancakeswap is a Decentralized Exchange (DEX) built for the Binance Smart Chain. Pancakeswap is similar to Uniswap in that it uses AMMs (Automated Market Makers) and liquidity pools. In fact, you can almost just think of Pancakeswap as the Uniswap for the Binance Smart Chain (BSC). One of the benefits of using Pancakeswap is that the gas fees are exuberantly cheap compared to Uniswap. This is because Binance is a proof of stake network allowing the transactions to be much fast as well as cheaper.
As of right now, the application has the amount of $16,473,821,537 in liquidity locked making it the largest DEX for BSC. Although Pancakeswap’s volume is consierably lower than Uniswap and other Ethereum based DEXs, it is increasing and CAKE is becoming one of the top decentralized exchanges.
How to use Pancakeswap?
There are many different wallets one can use for Pancakeswap including Trust Wallet, MathWallet, and even MetaMask. To learn how to configure MetaMask for BSC, read our article here.
As you can see above, one can navigate themselves to the trade feature on the website by clicking on the trade option on the left hand corner. Once, on this page, one can easily swap any BEP20 for another BEP20 token. Like all other DEXs, there is no intermediary which validates transactions. All transactions on Pancakeswap are decentralized and permissionless.
Before you can trade, you need to have a wallet than can be used on Pancakeswap. Any of the one’s provided above will do just fine. When on the Pancakeswap website, you can see a connect wallet in the top right hand corner. If you already have a wallet, you can click the connect wallet button and begin trading immediately.
Features on Pancakeswap
Some other neat features you can see on the left hand navigation window are the farming and pools options. Farming on Pancakeswap provides variable Annual Percentage Rates (APRs) considering which token you are farming. Users can stake their coins in “syrup pools” and earn interest.
There are also a number of games available on the application. One can buy lottery tickets and win rewards. There is also a Prediction feature which allows users to guess the price of BNB at a certain time. If the user guesses correctly, they can earn rewards in Cake, BNB, or stable coins.
There are small risks in using Pancakeswap. Since BSC is newer than Ethereum, that leaves a lot of room for scammers to abuse a less developed framework. The most common Pancakeswap scams are impersonator websites. When using Pancakeswap, always do a thorough check to make sure you are on the correct website. The address is Pancakeswap.finance. Never send your tokens to any other Pancakeswap domain, as you will risk to loose all of those coins. Bookmark the correct site so you always know you’re on the correct site without having to check.
Aaron is passionate about blockchain and has been an investor in cryptocurrencies for the past years. He enjoys engaging with other people in the cryptocurrency community online, particularly on Telegram, and learning from experts.