A Detailed Guide on How Covesting (COV) Works on the Binance Smart Chain and PancakeSwap
Following the listing of Covesting (COV) token on the PancakeSwap decentralized exchange (DEX), a guide on getting started will come in handy. The Covesting (COV) is an ERC-20 token built on the Ethereum Blockchain, but listing on the Binance Smart Chain (BSC) through a bridge will make trading on the BSC-supported DEXs possible.
In this guide, we would explore:
● The overview of the ERC-20-BEP 20 bridge,
● The Core Features of the PancakeSwap DEX,
● How to Connect your Hardware or Software Wallets,
● How to Swap COV to other tokens and vice versa,
● How to earn by providing Liquidity on PancakeSwap
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As the cryptocurrency ecosystem and decentralized finance (DeFi) in particular advances, innovations are emerging. The presence of competition in the space makes inherent offerings even more attractive to the end-users. The BSC bridge rolled out by Covesting is aimed at expanding our user’s access to more flexible offerings from the biggest DEX on the BSC network.
Unlike the centralized exchanges, with PancakeSwap or any other DEX, users trade by swapping tokens using liquidity from the liquidity pool without registering or compromising their identity. This feature is made possible by connecting a supported external wallet to the exchange.
The ERC-20 — BEP-20 Bridge in Brief
While the COV Token will continue to be an ERC-20 token, users will also be able to use it on the Binance Smart Chain Network. This will be done by utilizing the Covesting ERC-20 to BEP 20 bridge.
Through the bridge, users can easily convert ERC-20 COV tokens to the BEP-20 supported version and vice versa. This switch from one chain to another may attract a transaction cost determined by the underlying network. Users should note that using the bridge for switching tokens may take a little time, depending on the network’s congestion.
Bridging from COV ERC-20 to the BEP-20 version means that the former will get placed into a deposit account on Ethereum while being minted on the Binance Smart Chain as BEP-20. When bridging back, the equivalent amount is burnt off on the BSC, while the deposited ERC-20 tokens are unlocked.
The Core Features of the PancakeSwap DEX
The PancakeSwap decentralized exchange has an easy-to-use interface and has an array of supported tokens cut across multiple chains. There are two domains:
● The Information Pool Domain and;
● The Domain for the core exchange products (Swapping and Liquidity Provision).
The information pool domain serves as a data aggregator for all of the tokens listed on the platform. Through it, we will monitor the COV token price and other related data such as the volume etc. The product domain page features swapping, liquidity provision, and the more custom-made PancakeSwap products such as Syrup Pools.
The Binance Smart Chain Explorer for COV can be accessed here
How to Connect your Hardware or Software Wallets
To connect your wallet to PancakeSwap, visit https://pancakeswap.finance/. At the top right corner, click on the “Connect” icon, and you will see the interface as shown in the picture below:
Either your software or hardware wallets can get connected to the decentralized exchange. A variety of software wallets, as displayed, are supported. Using TrustWallet for this illustration, click on the displayed TrustWallet icon, and using either your Android or iOS backed mobile app wallet, scan the QR-code to connect.
If you want to add COV BEP20 in Trust Wallet, because it’s not yet showing up in the search list, click on “Add Custom Token” and add it manually:
· Token Contract Address: 0x0f237db17aa4e6de062e6f052bd9c805789b01c3
· Token Name: Covesting Token
· Token Token Symbol: COV
· Decimals of Precision: 18
The process with software wallets like Metamask differs slightly. If this is your preferred wallet, add the BSC First by opening MetaMask, and selecting “Custom RPC” from the Network dropdown options.
You will have the option to add the Binance Smart Chain network in the “Custom RPC” settings.
Network Name: Smart Chain
New RPC URL: https://bsc-dataseed.binance.org/
ChainID: 56
Symbol: BNB
Block Explorer URL: https://bscscan.com
Once done, click on save. The COV tokens may also not be readily available amongst the list of supported tokens, and as such, you can add it using the smart contract address as previously explained.
If you are using a hardware wallet like Ledger, you will need to install a Brave browser that comes with Metamask extension pre-installed, or rather, install the Metamask extension directly on Chrome. Once you have installed the Metamask, you can connect your Hardware wallet by navigating through the Crypto Wallets tab. Here is the interface as seen on the Brave Browser.
Once the connection is correct, you will see at the top right corner of the decentralized exchange that you are connected. Then you can start swapping or providing Liquidity using your COV tokens.
How to Swap COV to Other Tokens and Vice Versa
The use of decentralized exchanges differs significantly from their centralized counterparts as there are no order books. The features on offer by decentralized exchanges, however, range from Swapping to Liquidity Provisions and Farming.
To swap COV on the PancakeSwap, go to the Trade section and click on exchange. The interface that shows up highlights a means to switch “From” any of the supported tokens “To” another. This switch can be from COV to BNB, BUSD to COV, etc.
Access COV on the PancakeSwap here or use the COV address: 0x0f237db17aa4e6de062e6f052bd9c805789b01c3
For transactions on PancakeSwap, you will need a small amount of Binance Coin (BNB), the BSC’s native cryptocurrency, to cover up fees. This fee is usually small and may not impact much.
Liquidity Pool Provisions
When there is no liquidity, there is nothing to trade and no price can be determined. To maximize liquidity and trading opportunities, PancakeSwap offers everyone the ability to provide liquidity for the liquidity pool. Providing Liquidity to any COV token pair will earn you a return through liquidity fees. This earning mode is one of the beauties of DEXs.
To get started, navigate to the Trade/Liquidity section, and you will see the interface below;
While here, you can click on “Add Liquidity” to begin providing Liquidity to any COV-supported pools.
To understand how Liquidity pools work in practice, consider the COV/BUSD pair. Swapping from BUSD to COV means people are paying BUSD to get COV which means that BUSD is added into the pool while COV leaves the liquidity pool.
Let’s imagine the COV-BUSD liquidity pool has 2,000,000 COV worth $0.5 each and 1,000,000 BUSD valued at $1 each. It implies that for every 1 BUSD, you get 2 COV tokens based on a 2:1 basis. If a user swaps 50,000 BUSD to COV, they supply 50,000 BUSD into the liquidity pool and take out 100,000 COV tokens. This trade creates an imbalance in the pool as there are now 2,050,000 BUSD and 1,900,000 COV tokens remaining.
This imbalance has altered the original ratio, and we now have approximately 1.92:1, which means for every 1 BUSD, you get less COV tokens. In practice, the DEXs have highly functional smart contracts that pick these changes as trades go on simultaneously.
To facilitate the provision of liquidity, PancakeSwap pays out a defined percentage of swap fees to the liquidity providers corresponding to their share percentage in the pool. If you own 10% of the total liquidity pool, you get 10% of the swap fees generated.
Aim to Catch up With Other PancakeSwap’s Features
Besides the traditional swapping and liquidity pool offering from PancakeSwap, users can also take advantage of the “Farms” feature. If you provide liquidity as described above, you earn LP (liquidity provider) tokens. These tokens are essentially a confirmation of your deposit. After that, you can Stake these LP tokens to earn CAKE token, which is native to PancakeSwap DEX, and then stake CAKE to earn other tokens or even more CAKE.
The PancakeSwap Liquidity Pool Farm has this look:
Conclusion
The Covesting team understands that the decentralized finance world as we have it today thrives with the availability of multiple available alternatives to anyone, anywhere. While our addition of the Binance Smart Chain aims to complement the original Ethereum Network, users are now free to choose which network suits their needs the most. Our innovation will not end here, and we will keep you abreast of every new update through our official channels.
Yours,
Covesting team
