HomeCrypto blogWhat Is PancakeSwap?

What Is PancakeSwap?

Pancakeswap is a decentralized exchange that offers standard Defi opportunities token swapping, yield farming, and numerous forms of liquidity pools.

We will explain Finance smart chains’ largest decentralized exchange pancakeswap. The majority of Defi’s projects are built on the Ethereum network, and the company is now valued at 50 billion dollars. As is already known, Binance competes with Ethereum through the Binance Smart Chain, a smart contract ecosystem. in order to take advantage of Difi’s increasing liquidity. Because of this, Ethereum and the Binance Smart Chain share the same objectives and blockchain technology. Even the projects they continue to work on operate similarly.

How does pancakeswap work?

So for a better understanding of how pancakeswap works, we can simply think of it as the uni swap equivalent that Reigns Supreme and finances decentralized Market, however, can we call it an independent project, or is it just another copy? Pancakeswap is a decentralized exchange that offers standard Defi opportunities token swapping, yield farming, and numerous forms of liquidity pools, However, pancakeswap distinguishes itself from other decentralized exchanges by providing additional features that go above and beyond what they typically provide. Their users have access to Lottery’s digital collectibles in the form of non-fungible tokens, trading tournaments, and even launch pads for ambitious developer teams. Seeing their level of commitment to overhauling the Defi experience we can say with certainty that the pancakeswap team was not lazy when creating their exchange.

Thanks to Binance’s Smart contracts, they not only provide cheaper and quicker transactions but also a variety of tools and goods. Practically everything that a centralized exchange offers is provided by the Dex. So it isn’t really a surprise why pancakeswap is the third largest exchange by volume in the Defi sector and directly competes with uni swap.

Pancakeswap includes two essential cryptocurrencies cake and syrup. Both are based on the BEP 20 token standard. The token model revolves around using cake as a utility cryptocurrency that enables users to participate in Lottery’s swap tokens and purchase NFTs.

Staking, which distributes syrup as an LP token, is its secondary function. In return syrup holders are rewarded by earning 25% of cake emissions as long as they own the token. Users of pancakeswap can yield farm and join different cryptocurrency liquidity pools that are hosted on the Binance smart chain. Most liquidity pairs are linked to the proprietary utility token of BNB Finance.

Although investors lose access to Ethereum’s vibrant Defi Market by using pancakeswap. They get value for their money because they can deposit assets and trade at a much lower cost. Since finances solution is slightly more centralized compared to its competition the BSC blockchain confirms transactions with minimal fees.

Instead of discussing the same old features that appear on every other Defi project, we’ll talk about the new features that make pancakeswap Stand Out.

Lottery system

Pancakeswap’s first exclusive feature is the lottery system. Stakeholders can contribute to The Lottery by depositing their tokens in a special liquidity pool that distributes rewards in a randomized manner. Each user decides how many tickets to purchase, and if his numbers match the winning lottery ticket, he is awarded according to the total amount of liquidity deposited by all users. Every 24 hours, the lottery results are all automatically drawn. Despite the fact that winning the jackpot is not all that common, the community finds the lottery feature of pancakeswap to be surprisingly popular.

Binance bridge

Binance Bridge follows because it is situated in a different ecosystem. Pancakeswap is utterly disassociated from the majority of Defi. However, users have the option to fill the gap using the native cross-chain tool for Binance, the Binance Bridge. You can wrap assets on the Binance Bridge and convert them into P20 assets if you want to use Ethereum tokens on the PancakeSwap. This can be done on Binance’s main platform, but the feature is also integrated into pancakeswap as well.

While liquidity pools for ERC tokens are not widely used on pancakeSwap this tool allows Ethereum fans to enjoy Binance’s optimized smart contracts without selling their assets. 

What Is Yield Farming?
How does Yield Farming work?

Syrup pools

Another cutting-edge feature of pancakeswap is syrup pools. With these pools, you can stake cake tokens in exchange for the tokens of an upcoming project on the Binance smart chain. The main appeal of syrup pools is that they enable investors to speculate on a cryptocurrency that has not yet arrived on a pancakeswap. Additionally, by anticipatorily establishing staking pools, The Exchange does a fantastic job of bootstrapping liquidity for the new project.

Related: What Is Yield Farming? Defi Basics Explained

Initial Farm offering

Last but not least we have pancakeswap’s most unique decks featuring the initial Farm offering. IFOS is a decentralized version of ICOS that enables investors to support important new projects by participating in the token sale. Users are required to provide liquidity for both BNB and Cake tokens in order to participate in a token sale. They can use the previously deposited liquidity to purchase the Project’s tokens once the sale is open. Since the project is not listed on the market yet during an IFO investors pay a lower rate for tokens.

The fact that IFOS is a crowdfunding platform similarly encourages developers to sell their tokens before they are formally released. If you have trouble understanding the nature of pancakeswap, simply think of it as Binance’s version of uni swap or sushi swap. However, you must also remember that PancakeSwap is not another copy and that it actually provides far more features than its competitor.

The fact that some members of the community are against using PancakeSwap because it is based on the Binance Smart Chain is a significant disadvantage. In part because the smart chain violates a fundamental Defi rule by not being truly decentralized.

Related: What is a Liquidity pool in Crypto & How does it Work?

As long as users are willing to look past that pancake swap turns into a fast, economic and diverse exchange that successfully outperforms the market. Along with expanding quicker than other platforms, the project also succeeded in doing so creatively by providing features that had never before been seen.

Do you believe that pancake swap will replace Ethereum uni Swap and become the dominant decentralized Exchange in Defi let us know in the comments.



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