PancakeSwap

What is Pancakeswap (CAKE)?

PancakeSwap is a Decentralized Exchange (DEX) that runs on the BNB Chain. It empowers users to trade cryptocurrencies directly from their wallets without involving centralized exchanges.This DEX  deals specifically with BEP20 tokens that are defined under the Binance token standard to make them compatible with wallets, decentralized applications, etc.

It applies the AMM (Automated Market Maker) protocol, which uses pooling of Liquidity as a basis for trading pairs. It extends much more than staking in Syrup Pools, offering Liquidly, DAO (decentralized autonomous organizations), or IFO (initial farm offering), NFT trading, and participating in votes as governance.

The very stout infrastructure that PancakeSwap has spared for DeFi enthusiasts is guaranteed by quick transactions and low fees. Being a Layer-1 protocol inside the BNB Chain brings several use cases about while utilizing speed and performance of the blockchain. In addition to the above, the native token CAKE motivates earning, staking, and participation in other activities across the PancakeSwap ecosystem.

What is CAKE Token?

CAKE is the native utility token of PancakeSwap and serves to power multiple use cases within its ecosystem for staking governance and reward distribution. Users could stake CAKE tokens in Syrup Pools to earn more tokens. Besides it, the CAKE token will play a vital role in liquidity provision and yield farming, which involves users in contributing Liquidity to the PancakeSwap platform.

Moreover, CAKE is a governance token that enables users to cast votes on proposals that would either impact the future development of the PancakeSwap ecosystem or any upgrades made.Using PancakeSwap: How to Trade, Stake, and Earn on BNB Smart Chain

Using PancakeSwap: How to Trade, Stake, and Earn on BNB Smart Chain

• Setting up a Wallet:

You can choose a wallet compatible with Binance Smart Chain (BSC), such as MetaMask Trust Wallet or SafePal. This allows you to establish a desktop and mobile site that makes it flexible for you to control your crypto at will. 

Use official download sites, back up the recovery phrase, and store them safely. 

• Obtain BEP20 Tokens:

It is necessary to have BEP20 tokens, including BEP20 BNB, for transaction fees. You can use centralized exchanges or cross-chain bridges to transfer tokens from other networks into BSC.

• Connect Your Wallet to PancakeSwap:

After your wallet has been set up and your funds loaded onto it, connect to PancakeSwap by using its dApp browser. Select "connect wallet" and choose your wallet provider. 

• Start Using PancakeSwap:

Now that your wallet is connected, you can start dividing tokens, staking assets, and joining liquidity pools to work for your rewards on PancakeSwap. 

• Safety Promise:

Never let anyone look at your private key and recovery phrase. You could also consider using hardware wallets for enhanced security.

• You will find yourself exploring the decentralized world of PancakeSwap and making trades or earning rewards without going through all those centralized exchanges.

PancakeSwap V2 versus V3: Important Differences

What is Pancake V2?

The PancakeSwap V2 was developed as an upgrade to the V1 version, which had the basic functionality of swapping currencies and providing Liquidity. Starting from September 2020, PancakeSwap V2 has advanced features, including better token swaps, more yield farming, staking, and the ability to trade LP tokens directly. Improvements include efficiency, security, and user experience, and ultimately became a more robust decentralized exchange.

Key Differences: 

• Trading Fees: In V2, there is a fixed 0.25% trading fee, while V3 extends to four basic fee tiers (0.01%, 0.05%, 0.25%, 1%), thereby providing further flexibility with respect to choosing the better price. 

• Intelligent Routing: V3 utilizes smart routing, thereby being capable of discovering the best trading route across various liquidity utilizations so as to ensure that rates are better than those offered in V2. 

• Customizable Liquidity: V3 allows you to customize this or turn off specific liquidity sources so that you now really have better control over it.

How to Move Your Liquidity and Farm Staking to PancakeSwap V2 to  V3: A Step-by-Step Migration Guide

If you're farming or providing Liquidity on PancakeSwap V2, migrating your liquidity and farm staking to PancakeSwap V3 is essential to continue earning rewards. Here's a quick guide to help you migrate efficiently.

• Unstak from V2 or StableSwap Farms

On this page for Farms, you may find the banner called V3 Migration. Click Unstake All. After that, confirm the transactions in your wallet before clicking Next Steps.

• Remove Liquidity from V2

If you would like to migrate your Liquidity, click Remove beside the pairs. This will transact to remove your Liquidity from V2.

• Prepare for V3

No action needs to be done here: go and read about new and interesting aspects of V3 and how Liquidity works.

• Add Liquidity to V3

Click Add Liquidity to add your liquidity pairs from V2 to V3. Set your price range carefully; only active (in-range) positions will earn rewards.

• Stake in V3 Farms

Finally, click Stake to begin earning CAKE after adding Liquidity. Confirm the staking transaction in your wallet.

Pancakeswap (CAKE) History

Though professionally popularized as a Decentralized Exchange (DEX) in late September 2020. Built on Binance Smart Chain (BSC), it staged relatively faster transactions and cheaper fees than on any Ethereum network; its 0.2% swap fate all the more proved attractive because Ethereum was gapped with exorbitantly high gas fees. As of February 2021, it had surpassed Uniswap in terms of trading volume, and it developed into yield farming, staking, and AMM-type trading. Because of this, PancakeSwap became one of the leading stars in decentralized finance.

April 2023 brought PancakeSwap V3, with import-focused improvements for Consolidated Liquidity Automated Market Maker (CLAMM) to grant liquidity providers capital efficiency.

CAKE Tokenomics and Coin History

The CAKE Tokenomics are very crucial for PancakeSwap's ecosystem as they govern the emission, distribution, and burning of CAKE during the performance. It has an emission rate of 40 CAKE per block, amounting to around 1,152,000 CAKE in a day. However, due to burns, the actual emission figure is reduced to an average of around 39,245 CAKE in a day. This is because of many deflation mechanisms like manual burns and automatic burning of CAKE during activities in the platform. In brief, every transaction now has a part of CAKE being burned, including trades, IFO performance fees, and NFT minting.

Furthermore, during the weekly process, 9.09% of CAKE minted goes into the Dev address, where the portion is burned, thereby ensuring that it does not enter the supply. 3.06% of the emissions go into trading rewards, while 0.35% of these emissions go to the other ends. All these strategies on burn and emission make CAKE remain deflationary, thus benefiting the community of PancakeSwap

As of 2024, Cake Token's maximum supply stands at 450 million, while the total supply currently occupies a status of 386.3 million CAKE, with the circulating supply amounting to 293 million CAKE. The all-time low was recorded as $0.000232 on September 29, 2020, while it reached an all-time high of $44.18 on April 3, 2021.