What is PancakeSwap?

Sep 13, 2022
4 min read

This blog post will cover:

  • What is PancakeSwap?
  • Where did PancakeSwap come from?
  • What are the advantages of PancakeSwap?
  • What are the disadvantages of PancakeSwap?
  • How to buy PancakeSwap on SimpleSwap?

What is PancakeSwap?

Today we want to tell you about PancakeSwap. This is a decentralized exchange (DEX) built on the Binance Smart Chain blockchain (BSC). Compared to other DeFi projects that are built on the Ethereum blockchain, PancakeSwap has higher performance and lower fees. In addition, it uses the Automated Market Maker (AMM) model. This gives users the ability to trade digital assets without being matched against someone else, since the order book does not exist. Instead, trade goes against a liquidity pool where all orders are matched. The users deposit their funds into these pools and then receive liquidity provider (LP) tokens in return. Then tokens of this type can be used to farm the cryptocurrency of the PancakeSwap platform, which is called CAKE. That is, this project allows people to buy and sell assets, as well as earn and win tokens.

CAKE is the native token of the PancakeSwap platform. It was released in the BEP-20 standard for the BSC blockchain. This cryptocurrency can be used in different ways:

  • Staking
    Users stake their CAKE tokens in exchange for the new Binance Smart Chain project token. This means that by placing your CAKEs in the syrup pool, you can receive a BEP-20 project token in return.
  • Buying lottery tickets
    Using CAKE tokens, you can try your luck and win the lottery. The more lottery tickets a user buys, the greater the chance to win.
  • Voting
    The presence of governance tokens gives users the opportunity to vote. The larger the number of CAKEs, the higher the value of the vote.
  • Farming
    The customers can deposit their LP tokens on the farm locking them up in a process that rewards them with CAKE.

Where did PancakeSwap come from?

PancakeSwap is a very young exchange. Its story began with the launch on September 2020. Nobody knows anything about the creators of the exchange and the developers of this project, since they prefer to remain incognito. However, like all decentralized cryptocurrency trading platforms, PankakeSwap operates autonomously and is not managed by developers. At the same time, the exchange is run by the community. The participants make decisions on the development of the platform by voting. So, it is claimed that everything is in the hands of users.

What are the advantages of PancakeSwap?

  • Low fees
    Due to the fact that the platform operates on the Binance Smart Chain (BSC) network, users receive a fairly low commission.
  • High transaction speed
    BSC is considered to be faster than the Ethereum blockchain, so the transaction speed is approximately 3-4 seconds.
  • Opportunity to win NFT
    The exchange has created its own non-fungible tokens. Users have the opportunity to win them and either keep NFTs in the wallet, waiting for the price to rise, or immediately exchange them for the CAKE cryptocurrency.
  • Everything is anonymous
    In order to start working with the exchange, users do not need to provide any information about them and confirm its veracity with documents, and registration is not required at all.
  • Governance
    Users can support new ways for the development of the project and any updates (including choosing tokens for listing).

What are the disadvantages of PancakeSwap?

  • Complete autonomy
    The PancakeSwap exchange works completely autonomously according to pre-written smart contracts and it cannot be excluded that there may be a code error that could lead to security problems.
  • High level of competition
    There are many strong competitors similar to PancakeSwapin in the DeFi market, such as Uniswap and SushiSwap.

How to buy PancakeSwap on SimpleSwap?

PancakeSwap is currently one of the strongest competitors of similar projects such as Uniswap. With its dissimilarity to others, it attracts more and more users. If you are also interested in the cryptocurrency of the PancakeSwap project, then you can get CAKE tokens on SimpleSwap. The instructions below will help you make this purchase:

  • Choose the currency you want to exchange (e.g. BTC) in the first drop-down list. Enter the amount you would like to swap.
  • Select CAKE in the second drop-down list. You will see the estimated amount that you will receive after the exchange.
  • Enter the Recipient's Address. PancakeSwap will be sent to this address. Be careful and make sure you use the correct address.
  • Check all the information you have entered. If everything is correct click the Exchange button.
  • You will see the Bitcoin deposit address. You need to transfer the necessary amount of BTC to this address to start the exchange.

We are always happy to help you on SimpleSwap!

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