Pancakeswap 101: How to buy altcoins
Introduction
I guess you have come here after seeing the meteoric rise of altcoins like Doge, Safemoon or Elongate, and thought to yourself “I am going to be the next meme-coin millionaire.” Sorry to disappoint you, but I am not an oracle who will tell you about the next 100x coin. Actually, I am that little devil dancing on your shoulder telling you to gamble away your life saving.
Important: All these transactions will be done through the decentralized exchange Pancakeswap on BSC, also known as the Binance Smart Chain. It is very similar to the Ethereum blockchain with the main difference being gas fees. As of now the Ethereum blockchain is congested with astronomical gas fees which makes investments less profitable for retail investors (it’s practically negligible to whales). Thus a group of people decided to roll out an alternative blockchain that has lower fees. Many consider BSC as a temporary substitute until Ethereum’s Proof-of-Stake is released. In addition, BSC is more centralized than Ethereum.
Disclaimer: I am not a financial advisor. Invest at your own risk, never invest more than you can afford to lose and never take a loan to invest in a high-volatility market like crypto. Before you decide to invest in cryptocurrencies, stocks or even real estate, DYOR — DO YOUR OWN RESEARCH. In case you find a cryptocurrency that piques your interest, look for these things — How are the coins distributed? Do the developers own most of the coins? Is the liquidity locked? What is the use case and more. Here is a Reddit guide on DYOR 101 — Click here.
I will assume that you have some general understanding of the cryptocurrency world. However, if there are some terms that you are not familiar with, check out this glossary of all (actually most) the cryptocurrency terms, you will ever need. Here are a couple things you will need to get and understand before we can jump into the actual guide.
Binance —It is a cryptocurrency exchange where you can purchase BNB. BNB is the native token to the Binance Smart Chain, similar to what Ether is to the Ethereum network. We will need BNB to buy other coins on Pancakeswap and to pay for gas fees. Create your own Binance account here!
Binance is available on browsers, as a desktop application and mobile app.
Metamask — Metamask is a software cryptocurrency wallet that allows you to connect to the Ethereum and Binance blockchains. If you still have your coins on exchanges, I highly recommend you to transfer them out to Metamask or similar wallets because YOU actually get to control your coins here, as you get your own seed phrase. This makes it much more secure than leaving it on exchanges that are prone to cyberattacks.
You can download Metamask as a browser extension for Google Chrome, Firefox, Edge or Brave Browser. In addition, there is a mobile app for it, in case you don’t want to use a browser. You can also use other wallets instead of Metamask like — Trust Wallet, SafePal, etc. Install Metamask here.
Pancakeswap — Pancakeswap is a decentralized exchange or DEX for short. It is built on the Binance Smart Chain and serves as direct contender to Ethereum’s Uniswap. Its tools consist of swapping tokens, yield farming, staking. If you ever feel like gambling, you can use Pancakeswap’s token “CAKE” to join lotteries in hopes of winning a part of the prize pool.
Slippage — Unfortunately, when trading you will have to deal with this thing called slippage. Here is an explanation on what it actually is.
Slippage happens when traders have to settle for a different price than what they initially requested due to a movement in price between the time the order (say for Bitcoin) enters the market and the execution of a trade. This phenomenon can occur in all markets, like forex and stocks. — Coinmarketcap
Note that every DEX has some default slippage tolerance and in most of the tokens (these that are liquid) you don’t have to handle with anything. The reason why you have to significantly increase the slippage is, that most probably the token is not a good investment and nobody is buying it. In short terms, a high slippage means that the token or coin is an illiquid asset.
A step-by-step guide on how to buy altcoins on Pancakeswap
- Buying and checking the balance of your BNB
For this guide I am going to use the browser version of Binance. Assuming you have created an account on Binance and finished their KYC verification, here is what you need to do.
On the homepage you can either use “Buy Crypto” near the upper-left corner, where you get an abundance of deposit options, or click on the yellow “Buy Now” button. For the sake of simplicity I will use the “Buy Now” function. After clicking on it, you will be redirected to another page.
On the right side, you can see two small boxes saying “USD” and “BTC”. Click on “BTC” and in the search box, type in “BNB”, press Enter. You can do the same in the “USD” box, where you can choose the currency — e.g. EUR, CZK.
In the “Spend” column, input how much you would like to spend. Let’s say you want to pay 50 EUR, underneath it you can see how much BNB it will give you. Afterwards, choose your payment method and click on “Buy BNB”. Complete the payment process according to the instructions that will appear on the screen.
Note: There is a 1.8% fee on Binance when you buy cryptocurrencies using a credit or debit card. If you want to avoid these fees, you can also deposit money through a wire transfer or SEPA payment.
After your payment goes through, head to “Wallet” then “Fiat and Spot”. Here you can see how much fiat or crypto you currently have in your account.
2. Installing and setting up Metamask
Here is a quick guide on how to download Metamask, creating your own wallet and adding the Binance Smart Chain to your list of networks.
P.S. thank you papa CZ and Binance Academy for making my life easier.
3. Transferring BNB to Metamask
It’s time to finally transfer your BNB to your Metamask. Go to the previously mentioned “Fiat and Spot” wallet on Binance. Find BNB and under the “Action” list choose “Withdraw”.
It will redirect you to another page. There is box where it asks you to enter your address. To get your address, click on your Metamask extension then on “Account 1” and it will automatically copy your address. Before that you have to switch to the Binance Smart Chain network. (Metamask connected to the Ethereum network by default)
Now paste in your address. It will choose the network by itself. Afterwards, choose the amount of BNB, you would like to transfer to your Metamask wallet. (The minimum amount is 0.1 BNB) Press withdraw, shortly after the BNB will be deposited. It is also good to know that you won’t receive the full amount you decided to withdraw, because you have to pay the gas fee.
MAKE SURE TO ALWAYS CHECK IF YOU ENTERED IN THE CORRECT ADDRESS OR ELSE YOU WILL PERMANENTLY LOSE YOUR COINS!
4. Buying altcoins on Pancakeswap
We have almost reached the final destination. Now go to Pancakeswap and click on “Connect” in upper-right corner. Connect your Metamask wallet to the exchange.
After you are done with connecting your wallet, go to “Trade” then “Exchange” positioned on the left sidebar.
On this page, choose “Select currency”. Paste in the address of the coin you want to buy, then press Enter. In this example, I will be using Fox Finance’s token as the currency I want to buy.
$FOX is a BEP-20 charity token that mainly focuses on environmental aid. Created by a Czech law student. Interested? Check out FoxFinance.io
What is left is to choose the amount you want to buy and set the slippage. Let’s say I want to buy 0.01 BNB; Pancakeswap tells me, it is roughly 17 mil. $FOX. Before swapping, I also have to set the slippage.
Exit the settings and click on swap. If it’s your first time, you might have the “Approve” button instead of “Swap”. Simply click on “Approve”, a Metamask window will pop-up asking you for a confirmation or rejection, and to pay like a 10 cents fee. Confirm it then click on “Swap”, then “Confirm Swap”. A final Metamask notification will show up where you can set the gas fee. (Just leave the default gas fee) Additionally, it shows you the final cost of the transaction. All you need to do is hitting “Confirm” and the transaction will go through. You are finally done!
Don’t forget to add the tokens to your Metamask wallet so you can view them there. Open the extension, go to “Assets”, “Add Token”, “Custom Token”, and paste in the token address. Finalize it by hitting “Next”.
If you want to see how your tokens are doing, use can either use poocoin charts or probably the best collection of Smart Chain tools at bogged.finance — charts, limit orders and more to come!
(This not sponsored, but if someone at bogged.finance or poocoin is reading this. Sponsor me, please.)
Final words
Thank you for reading my guide and hopefully it was at least a bit helpful to some of you.
May your invest reach the moon and beyond. *insert rocket emojis and whatnot*
Also if any of you are filthy rich and don’t know what do with your Binance chain tokens. (I will take Ethereum based tokens too, I am not picky)
Feel free to tip me here — 0x1ED2Dd04C2f2E2E2c3718DB61a36d7d8DFAe61BE
