During an era where the ETHereum blockchain is unusable for most people due to very high fees, DeFi is slowing down… Until PancakeSwap and VenusProtocol come out!
Both these platforms are using the Binance Smart Chain aka BSC. The BSC is created based on the ETHereum blockchain open source code and keeps a lot of properties from it but also induces low fees. The gas is paid in BNBs and represent currently around 0,20$ rather around 80$ on ETHereum.
By creating this blockchain Binance took a major place into the DeFi ecosystem by allowing developers to create various DeFi ETH copycat (or not) platforms based onto it.
Thus PancakeSwap is born. PancakeSwap is more or less a Uniswap copycat.
→ GET 10% less fees on BINANCE NOW
PancakeSwap and its $CAKE
PancakeSwap has its own token: the $CAKE. You can buy it, stack it, earn it. By providing liquidity to PancakeSwap in many tokens including $CAKE itself you can earn more $CAKE through what is called liquidity mining.
Farming
There is two ways of stacking on PancakSwap, the first one is farming. You will have to provide liquidities to a basic 50/50 pool made of two different tokens. This Pool will then remunerate you in $CAKE according to an Annual Percentage Yield aka APY. This APY can change along the time and is not guaranteed.
As you can see here, those pools have different properties including APY and crypto-pairs. Whatever the APYs seem very interesting.
WARNING: Providing liquidities to a Pool includes risk, learn more about impermanent losses here.
Stacking
The second way to earn compound interest on your liquidities is the “Pools” section. This one allows you to stack whatever token is available to and earn $CAKE or the token stacked itself.
The advantage of this method is that you are not exposed to impermanent loss what reduces the risk.
→ GET 10% less fees on BINANCE NOW
This brief review of PancakeSwap is ending, if you want more informations on this protocol it would be a pleasure for me to help you and write other more detailed articles.