Key info (August 18, 2022)
- Circulating Provide — 146,045,553 CAKE
- Complete provide — 319,812,724 CAKE
- Sector — DeFi, sensible contracts platform
- Token Sort — Native
- Token Utilization — Governance, voting, yield farming, staking
- Launch date: September 2020
- All-time excessive — $44.18
- ATH Date — April 30, 2022
- Market Cap — $624,020,404
What’s PancakeSwap?
Contemplating the meals reference, one may assume that the individual behind this crypto time period is a world-famous TV chef, like Gordon Ramsay. However no, PancakeSwap (CAKE) shouldn’t be a joke, regardless of its considerably comical identify. Quite the opposite, it is among the hottest dApps of all time, because of often clocking in additional than $100 million in 24-hour buying and selling quantity.
PancakeSwap skilled unprecedented adoption following its meteoric development in lower than a 12 months. Consequently, because it eclipsed even Binance’s personal Binance DEX, it has develop into by far probably the most dominant DEX on BNB Chain.
Technically talking, PancakeSwap is a decentralized finance (DeFi) utility functioning as an AMM (automated market maker). It permits customers to change tokens and earn charges in return, thereby offering liquidity by way of farming (the method of staking or lending cryptocurrency in change for curiosity or different rewards).
Because of its sizeable consumer base, wide-ranging characteristic set, and big liquidity, PancakeSwap has develop into a phenomenon within the cryptocurrency world in latest months. Its main goal is to guard customers from shedding management over their personal keys by eliminating the necessity to depend on centralized providers. Concurrently, PancakeSwap permits customers to securely commerce Binance Coin (BNB) and quite a few different BEP-20 tokens on its community.
Since PancakeSwap is a decentralized change, all trades are executed mechanically by way of sensible contracts, eliminating counterparty dangers fully.
A short historical past of PancakeSwap
The PancakeSwap sensible contract code and web site are open to public scrutiny, though the crew behind this DeFi is totally nameless. Regardless, a number of distinguished blockchain safety corporations like Slowmist and Certik have audited the platform. The scarce data that is accessible on the founders reveals that the crew consists of quite a few “cooks” (as its members are referred to as), varied engineers, and two co-leads, Thumper and Hops.
United by their obvious ardour for pancakes, the crew launched PancakeSwap in September 2020. Throughout its rise to crypto stardom, the platform has considerably elevated its number of options, attracting numerous customers and spectacular liquidity of supported property. Consequently, it isn’t an overstatement to say that this platform exists as a complete ecosystem of DeFi instruments designed across the native utility token of this platform, referred to as CAKE.
Understanding how PancakeSwap works
As talked about above, PancakeSwap is an automatic market maker, which is a kind of DEX. If you happen to’re new to the crypto world, you’ll be able to consider PancakeSwap as having no restrict/market orders, bid/ask system, or order books.
So, how does this DEX work if that’s the case? Nicely, in case you are a consumer buying and selling on this platform, you draw liquidity mechanically from one or a number of liquidity swimming pools. As soon as the commerce is full, these swimming pools rebalance (additionally mechanically).
Subsequently, trades that happen on an automatic market maker, corresponding to PancakeSwap, draw liquidity from one facet of the pool and add it to the opposite. Customers generally known as liquidity suppliers, or LPS, contribute this liquidity in equal values to either side of a pool.
Their contributions develop the general quantity of liquidity accessible within the pool, and in return, customers obtain LP tokens proportional to their share. Conversely, retrieving a consumer’s fraction of the pool requires returning these tokens.
Picture supply: cryptorobin.com
Regardless, the motivation for offering liquidity is that LPs declare a share of the transaction charges from the swimming pools to which they contribute. Each makers and takers pay a flat 0.25% transaction charge, and liquidity suppliers share most of that quantity amongst themselves.
Lastly, the PancakeSwap treasury funds its namesake platform, which is at present receiving 15% of all generated buying and selling charges.
Core use instances of PancakeSwap
PancakeSwap offers the last word buying and selling expertise to end-users by leveraging a number of of its distinctive properties. For example, it ensures fast execution of trades, because of fast affirmation instances and low transaction charges. Concurrently, PancakeSWAP boasts greater safety than different AMMs on blockchains with slower block instances. That is bolstered by the community not often affected by displacement assaults, corresponding to front-running.
Moreover, a variety of secondary options awaits PancakeSwap customers, a few of which working to additional enhance the utility of CAKE tokens. Some examples embody:
- IFOs (Preliminary Farm Choices)
- Yield Farms
- Syrup Swimming pools
- Lottery V2
- Prediction Markets
- NFT Collectibles
Preliminary farm choices
PancakeSwap makes it doable for customers to amass new early-stage challenge tokens earlier than their official public launch, which has similarities to an IDO (Preliminary DEX Providing). The distinction is that, within the case of an IFO, customers purchase new challenge tokens in change for his or her CAKE-BNB liquidity supplier (LP) tokens.
This process additionally provides a deflationary mechanism for the token as a result of half of the full funds (on the CAKE facet of the equation) are burned as a part of the method. Examples of initiatives that had been launched by way of this methodology are Scorching Cross, Soteria, and Ditto.
Yield farms
By utilizing one in all its quite a few yield farms to encourage the staking of staking-supported liquidity supplier (LP) tokens, PancakeSwap permits customers to earn a further yield. In different phrases, customers earn a CAKE yield on their liquidity supplier tokens by collaborating in a yield farm. Word that this yield is on the market on prime of the yields customers earn by way of transaction charges.
Though the APY can go as excessive as a number of hundred %, the precise quantity normally varies from one farm to a different. Nonetheless, when partaking on this exercise and making an attempt to calculate their general yield, customers must also think about potential impermanent losses.
Syrup swimming pools
Customers can stake varied BEP-20 tokens and earn a yield by utilizing the platform’s Syrup swimming pools — the equal of PancakeSwap’s simple staking performance. The ensuing yield is normally accessible within the type of reward tokens, usually CAKE, though others can be found as properly.
The APY per pool can range, similar to with the platform’s yield farms. Subsequently, this exercise additionally warrants the identical warning: when calculating your true yield, it may be helpful to think about the altering worth of your staked property.
Lottery V2
The lottery characteristic accessible on this decentralized change is one more facet that makes it stand out. It permits customers to doubtlessly take down a major pot of CAKE by shopping for lottery tickets.
At present charges, the value of a single ticket is roughly $5. Nonetheless, buying 100 tickets concurrently might enable customers to say as much as a 4.95% low cost. Consequently, customers who efficiently match all six numbers on their lottery tickets will obtain a complete of 40% of the prize pool. Winners will then share the prize equally amongst themselves.
Prediction markets
PancakeSwap additionally contains a distinctive prediction market device, which permits customers to watch a five-minute timeframe and try to predict whether or not Binance Coin’s (BNB) worth will rise or fall. On the one hand, unsuccessful predictors forfeit their guess quantity, however on the opposite, winners share the prize pool funded by all contributors.
NFT collectibles
PancakeSwap added NFT Profiles in February 2021 – a novelty characteristic permitting customers to buy one of many accessible Bunny NFTs and even select an NFT profile image. These with a whole profile will develop into a part of a particular crew to earn rewards by collaborating in community occasions.
PancakeSwap token CAKE
PancakeSwap’s native utility token known as CAKE, and it serves varied functions throughout the DEX’s constantly rising panorama. Its main capabilities embody:
- Yield farming
- Staking
- Collaborating within the PancakeSwap Lottery
- Enabling voting on governance proposals by way of the platform’s neighborhood governance portal
Governance
The neighborhood partially governs PancakeSwap, which means that people who personal CAKE tokens can vote on governance proposals by way of the community’s native voting portal. Among the proposals are tabled instantly by the neighborhood, and others are proposed instantly by the PancakeSwap core crew.
At CEX.IO, you’ll be able to purchase CAKE and change it for USD (and, often, see us use pop-culture references like Gordon Ramsay…however that’s a narrative for an additional time). Along with benefitting from the options that PancakeSwap gives, you may as well commerce CAKE to reap the benefits of its widespread adoption potential.
