Pancake Swap for Beginners.
Once upon a time, Defi was synonymous with Ethereum, and Ethereum remains the primary cryptocurrency in this niche.
However, the hefty gas fees on the Ethereum network have forced the ordinary Defi user to seek more cost-effective options. Hence, the proliferation of Dexes such as Pancake Swap, Sushi Swap, etc.
The open-source nature of most Defi protocols has made it possible for other smart contracts blockchains, such as the Binance smart chain, to replicate the same Defi protocols.
The Pancake Swap Protocol is an example of such a protocol.
See also: Understanding Decentralized Exchanges; Beginner’s Guide.
Uniswap Vs. Pancake Swap
Uniswap is an AMM platform based on the Ethereum platform. It was founded by Hayden Adams in 2018, who secured modest funding from the Ethereum Foundation after his buddy connected him to Ethereum’s founder, Vitalik Buterin.
Pancake Swap is an AMM platform built on the Binance Smart Chain. A team of Anonymous developers created it in September 2020. Pancake Swap was developed by unknown developers and is not overseen by Binance.
The only funding received by Pancake Swap seems to have come from Binance as part of their 100-million-dollar Defi Accelerator Fund on the Binance Smart Chain.
Pancake Swap is a clone of Uniswap. Hence the two games are identical. According to an anonymous post on Reddit, a significant portion of the pancake swap’s code still references Uniswap.
See also: What is Ethereum the Merge?
Differences Between Pancake Swap and Uniswap.
Pancake Swap has some features that Uniswap does not have.
1. Yield Farming
You can stake liquidity provider tokens to earn cake and stake cake to earn additional cake or other Bep-20 tokens with Pancake Swap’s two yield farming tools. In numerous of these pools, the annualized rate of return exceeds 100%.
You can also buy lottery tickets with cake tokens for a chance to win the full pot of cake utilized in each lottery round. You can also purchase numerous NFT memorabilia using cake.
2. Initial Farm Offering (IFO)
Pancake Swap has an Initial Farm Offering that allows you to exchange your liquidity provider tokens for tokens from a new cryptocurrency project. The project gets your BNB, you get the tokens, and pancake swap burns your cake.
3. Gamification
Another aspect of pancake swap is the existence of gamification through the usage of community teams, leaderboards, and even other tasks and achievements.
4. Trading Volume
Uniswap and Pancake Swap have similar trading volumes. However, Uniswap offers more tokens and trade pairs than Pancake Swap. Uniswap has about 1600 tokens and 2100 trading pairs, whereas Pancake Swap has about 96 tokens and 690 trading pairs.
5. Trading Fees
Pancake Swap charges 0.2% on all transactions, whereas Uniswap charges 0.3%. The entire charge goes to Uniswap Liquidity providers, but on Pancake Swap, 0.17% goes to Liquidity providers, and 0.03% goes to supporting the Pancake swap treasury, which protocol developers' control.
Uniswap has a considerably more complex governance structure than pancake swap.
6. Usability
The most fundamental distinction between Uniswap and Pancake Swap is usability. To utilize Uniswap, you’ll need a browser wallet plugin like Metamask, and making a deal often costs between $40 and $100 in gas fees.
Uniswap transactions also take a long time to complete, especially if you are not paying the highest gas fees. This is not particularly feasible for the normal person making little transactions, which is why whales largely use the site.
Pancake Swap transactions, on the other hand, are charged in BNB and are extremely cheap. A single trade on Pancake Swap normally costs only a few cents in BNB gas expenses. Transactions on Pancake Swap are likewise incredibly quick and efficient.
This is why the site has experienced an increase in users and total value locked. Additionally, users can use the Binance exchange to convert their wrapped assets on the Binance Smart Chain, such as BTC and ETH, into their native currency.
See also: The Best NFT Marketplaces in 2022
How Does Pancake Swap Work?
A wallet such as MetaMask or TrustWallet is frequently used to access PancakeSwap, on a decentralized application (DApp). These wallets can access PancakeSwap’s smart contracts once they have been configured to interact with the Binance Smart Chain.
The PancakeSwap treasury, which now receives 15% of all trading fees generated, is in charge of funding and maintaining the site.
How To Use PancakeSwap?
Before you can use Pancake Swap, you must first acquire one of the major cryptocurrencies, such as Binance Coin (BNB), Bitcoin (BTC), Ethereum (ETH) or Tether (USDT).
To use PancakeSwap, you must first connect your digital wallet (such as Metamask) to the exchange (Pancake Swap). After depositing BNB into your Trust Wallet, you’ll be able to use PancakeSwap to exchange BNB for another coin.
To do this, select Trade from the menu to access the Pancake exchange. There are usually two options: Swap (Trade) or provide liquidity.
Unlike a centralized exchange, anyone can create a pair, offer liquidity, and create a new DEX market on the Pancake Exchange. After you’ve picked your assets, click Swap, confirm the transaction in your wallet, and you’re done!
You can only swap BEP-20 tokens on the PancakeSwap DEX. PancakeSwap is powered by Binance Smart Chain, not Ethereum. If you only have ERC-20 tokens, you can use the Binance Bridge to encapsulate them for use on Pancake Swap.
Conclusion
Pancake Swap is an AMM platform built on the Binance Smart Chain. The only funding received by Pancake Swap seems to have come from Binance. According to an anonymous post on Reddit, a significant portion of pancake swap’s code still references Uniswap.
Uniswap is an AMM platform built on the Ethereum platform, founded in 2018 by Hayden Adams. It has about 1600 tokens and 2100 trading pairs, whereas Pancake Swap has about 96 tokens and 690 trading pairs.
To use Pancake Swap, you must first acquire one of the major cryptocurrencies, such as Binance Coin (BNB), Bitcoin (BTC), Ether (ETH) or Tether (USDT). You can also create a pair and offer liquidity on the Pancake Exchange.
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