PancakeSwap (Symbol: CAKE) is an automated market maker and Decentralized Exchange (DEX) that allows tokens to be exchanged on the Binance Smart Chain. Users can earn $CAKE tokens by providing liquidity to the platform, staking, and also get a chance to win some $CAKE tokens through a lottery.
PancakeSwap launched in September 2020. The project has over $1,000,000,000 in Total Value Locked (TVL).
On February 17, 2021, PancakeSwap became the first billion dollar project on the Binance Smart Chain.
- CAKE is the Governance Token
- Yield Farming
- Users trade against a Liquidity pool
Token swaps on PancakeSwap allow users to trade one BEP-20 token for another via automated liquidity pools. The liquidity provided to the exchange comes from Liquidity Providers (LPs) who stake their tokens in “Pools. In exchange, they get FLIP (PancakeSwap Liquidity Provider) tokens, which can also be staked to earn CAKE tokens in the “farm”.
When users make a token swap (trade) on the exchange exchange you will pay a 0.2% trading fee, which is broken down as follows:
- 0.17% – Returned to liquidity pools in the form of a fee reward for liquidity providers.
- 0.03% – Sent to the PancakeSwap Treasury
PancakeSwap pools allows users to provide liquidity by adding their tokens to liquidity pools or “LPs”.
When users add their token to a liquidity pool (LP), they receive FLIP tokens (PancakeSwap’s version of liquidity provider tokens).
As an example, if a user deposited $CAKE and $BNB into a liquidity pool, they would receive CAKE-BNB FLIP tokens. The number of FLIP tokens they receive represents their portion of the CAKE-BNB liquidity pool. They can also redeem their funds at any time by removing their liquidity.
Providing liquidity is not without risk, as users may be exposed to impermanent loss. Liquidity providers will also be given a reward in the form of trading fees. Whenever someone trades PancakeSwap, the trader pays a 0.2% fee, of which 0.17% is added to the liquidity pool of the swap pair they traded on.
- There are 10 FLIP tokens representing 10 CAKE and 10 BNB tokens.
- 1 FLIP token = 1 CAKE + 1 BNB
- Someone trades 10 CAKE for 10 BNB.
- Someone else trades 10 BNB for 10 CAKE.
- The CAKE/BNB liquidity pool now has 10.017 CAKE and 10.017 BNB.
- Each FLIP token is now worth 1.00017 CAKE + 1.00017 BNB.
Liquidity Providers can also put their FLIP tokens to work whipping up some fresh yield farming on the, while still earning their 0.17% trading fee reward.
The Initial Liquidity Pools (LPs) for farming CAKE tokens included:
- BAKERY LP
- Reward per block – 40 CAKE
- Daily emission (Based on 30k blocks per day) – 1,200,000 CAKE per day
- Farmers – 75% of the rewards per block (30 CAKE)
- SYRUP holders – 25% of the rewards per block (10 CAKE)
- Farmers daily – 900,000 CAKE (based on 30k blocks per day)
- SYRUP holders daily – 300,000 CAKE (based on 30k blocks per day)
“Stack your CAKE with syrup.”
- 25% of CAKE emissions will be distributed to SYRUP holders every block. Users can claim these rewards and re-invest them.
- CAKE holders can swap CAKE for SYRUP at a 1:1 ratio.
- CAKE is distributed proportionally at each block based on SYRUP holdings.
- We will only record and distribute CAKE rewards to the wallet address that initiated the SYRUP staking. While Syrup can be sent to other addresses only the initiating address will receive the CAKE rewards.
Golden Syrup (Lottery)
To be announced by the team.
On October October 12, 2020, PancakeSwap announced via Twitter, that users could purchase PancakeSwap merch on Teespring.
On October 9, 2020, PancakeSwap was ranked as the number one DeFi dApp ranked by 24 hour users at the time.