What is Pancakeswap ?

Pancakeswap : a decentralized exchange and his token CAKE

Pancakeswap is a decentralized cryptocurrency exchange for swapping BEP-20 tokens. Anyone who knows about Uniswap and Sushiswap won’t have a problem understanding Pancakeswap. Pancakeswap is built on the Binance Smart Chain but it is decentralized. It uses an Automated Market Marker (AMM) which means it does not use a ledger book to match digital assets traders but it works on the liquidity pool.

Liquidity pools are provided by users who deposit funds to the pool to receive what is called liquidity provider tokens. Pancakeswap is profitable compared to other cryptocurrencies because as a user, you can choose to trade BEP-20 or contribute to the pool and get rewarded as people trade.

Pancakeswap uses a governance token called CAKE. All the contributors get rewarded in CAKE. When you acquire Liquidity provider tokens they start making a profit : this is called farming. SYRUP Pools are provisions where owners of CAKE can stake it to make more CAKE. Earning through SYRUP pools is a way to make more profit passively because what you choose to stake makes a profit without them being involved.

PancakeSwap CAKE Cryptocurrency. PancakeSwap coin growth chart on the exchange, chart

The other advantages of Pancakeswap

Pancakeswap also offers lottery services, each lottery session takes six hours where you choose four digits from 1 – 14 and a random four-digit combination will be given and if happen to have matching numbers then you win the jackpot which is 50% of the total lottery pool. You also get bonuses for 2 or 3 numbers lying in the same position as the winning ticket. The lottery ticket costs 10 CAKE.

A newly launched tokens need to get to the hands of users. Users can get access to these tokens by using the power of yield farming which is dedicating ones’ Liquidity Provider tokens to a supported pool.

Pancakeswap may be having all the advantages but it is Smart Contract buying and cryptocurrency trading which is volatile with prices changing due to speculations, therefore if anyone is thinking of investing in it, they should only spend money they can comfortably lose. 

If you have liked this article, you may like as well the one on Dogecoin.

This article is not investment advice. Do your own research before investing in the cryptocurrency market.

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