PancakeSwap Review 2024
PancakeSwap Review
PancakeSwap is a popular decentralised cryptocurrency exchange with gamification features and a range of channels through which to earn crypto. The platform has hundreds of tokens, yield farming, liquidity pools, lotteries and more. This PancakeSwap review will delve into the DEX’s pricing structure, tokens, features and more.
PancakeSwap Headlines
Continuing the trend of food-based decentralised exchanges (DEXs) like SushiSwap and BakerySwap, PancakeSwap was created by anonymous developers with a release date of 20th September 2020. Since then, it has grown rapidly in the decentralised finance sector (DeFi) with a market cap of more than $4 billion.
PancakeSwap is a DEX built on the Binance Smart Chain (BSC), which, when compared to similar DEXs built on Ethereum (ETH) like Uniswap and 1Inch, offers faster transactions and lower fees. Unlike a traditional centralised exchange, such as Binance or Coinbase, a DEX can be explained by a means to remove the intermediaries between traders by using smart contracts to replace the entities that oversee the transactions. Primarily, PancakeSwap uses BEP-20 tokens from the BSC but it is possible to use other tokens via the Binance Bridge by “wrapping” them as a BEP-20 token.
PancakeSwap uses smart contracts by setting up liquidity pools that are run by the automated market maker (AMM) system. Liquidity pools are large collections of funds made up of tokens that users have staked and are governed by algorithms that complete the trading orders between users. This means that, rather than traditional trading whereby the buyer needs to find a seller to complete their order, on PancakeSwap, the buyer is simply trading with a contract on a distributed ledger, as long as there is sufficient liquidity in the loop.
If you wish to see charts and graphs for PancakeSwap or see the conversion rate of one PancakeSwap (CAKE) to USD, you can look at websites like CoinGecko or CoinMarketCap on your browser.
Payment Methods
PancakeSwap does not accept deposits of fiat currencies, so you will need to purchase cryptocurrencies with an entry-level exchange (an exchange that allows you to swap fiat currencies like USD and GBP with cryptocurrencies).
To trade on PancakeSwap, you will need to connect your digital wallet, which is a simple process (scan a QR code or add PanckeSwap’s network). There are a series of guides for PC, iPhone and Android on the PancakeSwap website that help you to connect wallets like MetaMask to the exchange or to create a new one.
Once you have crypto in your digital wallet, convert some to the BEP-20 token via Binance, Binance Bridge or SafePal, as recommended by PancakeSwap. Registering for an account is not necessary, you can trade without signing up.
Ways To Trade
There are a series of trading options available on PancakeSwap.
Exchange
This is the simplest method of trading as all you need is a compatible wallet and some BEP-20 tokens to work with. To execute a trade, go to the exchange page on PancakeSwap’s website and select the two tokens you wish to swap. Here, you can chart the value history of a token or carry out a swap. First, choose either the number of tokens you wish to ‘sell’ or the number that you wish to ‘buy’, with the price prediction quoted in real-time.
Ensure that you use the more updated exchange, PancakeSwap V2, where prices on pairs are better. The older version, PancakeSwap V1, is more prone to slippage, which can result in lost capital.
As there are frequently new coins being added to PancakeSwap, it is easy to lose track of what is and is not available on there. For this, you can use websites like dextools.io to see any new listings.
Provide Liquidity
PancakeSwap provides the opportunity to earn passive capital through staking your tokens on liquidity pools. If you deposit CAKE and WBNB in a liquidity pool then you will receive CAKE-WBNB-LP tokens, the number of which represent your portion of the corresponding pool.
When traders use the CAKE WBNB liquidity pool to carry out exchanges, you earn rewards from the trading fees. The trading fee is 0.25%, of which 0.17% is added to the liquidity pool, increasing the value of your LP tokens, which can then be redeemed for your funds anytime you wish.
Yield Farm
The LP tokens you collect from depositing your tokens into liquidity pools can also be used to earn rewards in the form of CAKE. PancakeSwap has several yield farms, all of which require you to stake two tokens to get the LP tokens that correspond to the exact farm.
For example, you would require CAKE-WBNB LP tokens to stake into the CAKE-WBNB farm. The farms will have a multiplier attached to them that relates to the amount of CAKE they receive per block. The CAKE-BNB farm has a 40x multiplier, which means that, for every block produced, it receives 40 CAKE.
Syrup Pools
Similar to yield farms, PancakeSwap also offers syrup pools. These both work in the same manner, though they only require one type of LP token, rather than two, such as CAKE LP. The main difference between syrup pools and yield farms is that yield farms offer better rewards but carry the risk of impermanent loss.
This occurs when the value of your portion of the farm is less than the tokens would have appreciated to if left out. However, the incoming trading fees usually offset this to make it profitable.
There are two main types of syrup pools available: Auto CAKE and Manual CAKE. Auto CAKE will automatically harvest and re-invest any CAKE you earn, like a bot. Manual CAKE will let you choose when to harvest your CAKE and what you then do with it. There is a range of other syrup pools available where you can earn tokens other than CAKE but all of them require you to stake CAKE LP tokens.
Initial Farm Offering
PancakeSwap allows users to launch their own tokens to be distributed to yield farmers via an initial farm offering (IFO). An IFO is an opportunity for these projects to generate some funds whereby participants can stake tokens into new listings. To participate, you must have an active profile, which costs 1.5 CAKE to set up and you can only stake using CAKE-BNB LP tokens, so you will need to buy some CAKE and BNB tokens and add them to liquidity pools beforehand. There is also a participation fee to be paid by contributors, which is then converted into CAKE at the end of the sale and burnt.
Commissions
PancakeSwap charges a transaction fee of 0.25%, with 68% of the fee going to the liquidity providers. The rest is either sent to the PancakeSwap Treasury and burnt or used to buy back CAKE and subsequently burnt. There are no transfer or withdrawal fees on PancakeSwap.
For DEXs there are high network fees paid by the traders for using the computing energy to process exchanges and transactions. This network fee is called a ‘gas’ fee and users can manually set a limit for how much they are willing to pay.
Leverage
PancakeSwap does not yet offer traders the opportunity to perform margin trading. It is on its roadmap of things to do so keep an eye out for it in the future, but PancakeSwap does emphasise that there is no timeline nor order to which features or products are introduced next.
Mobile Apps
PancakeSwap does not provide its own mobile app. Instead, you can use a series of different android or iOS apps that you can download to access the PancakeSwap ecosystem on mobile. Some supported apps include WalletConnect, Trust Wallet and Ledger Nano.
Deals & Promotions
NFTs
The gamification of PancakeSwap’s ecosystem has provided more methods for users to earn rewards. One of these is in the form of special non-fungible tokens (NFTs) that can be either traded for their value in CAKE or kept in a digital wallet. NFTs can be won through team trading games whereby users will join one of three teams that all compete to see who has the greatest trading volume in a period of time. NFTs can also be won via PancakeSwap airdrop events, such as the “Bullish” Lunar New Year NFT distributed to the first 8,888 users who made profiles.
Lottery
There is also a PancakeSwap lottery system allowing users to win large prizes with a lottery starting every 12 hours. Tickets are bought in CAKE and are priced equivalent to approximately 5 USD but can be discounted if purchased in bulk. Each ticket is made up of six numbers between 0-9, for example, 9-1-6-2-6-7. If the purchased ticket matches the same numbers in the same order as the winning ticket, then the jackpot (half of the total lottery pool) is paid out. If only some of the numbers match, then a portion of the jackpot is paid out, depending on how many numbers match.
Customer Support
There is no official customer support provided by PancakeSwap that you can contact. There is a troubleshooting page on the PancakeSwap website that provides a list of common errors such as “price impact is too high” or “PancakeSwap router has expired”, along with the solutions and the reasons why the errors occurred.
If you have any questions or a query regarding an error, it can be helpful to seek help and support online either by checking financial news sites or asking PancakeSwap’s official social media channels on Reddit, Twitter, Medium, Instagram or Telegram.
Additionally, you might find help from the community on any of the prior listed social media, 4Chan, Quora, Discord channels or by watching tutorial videos on YouTube. These will be useful for other issues such as “no provider was found” or “approving is stuck and not working” that you cannot find answers to on the official support pages.
Safety & Security
PancakeSwap has been audited by cybersecurity firm CertiK, so users can be assured that it is a relatively safe and reliable exchange to trade on. It is important to note that there is always the risk of a hack occurring, such as when PancakeSwap was down after experiencing a DNS hijack that occurred in March 2021. This risk is quite high as, according to the blockchain data company Chainalysis, half of all the cryptocurrency-related hacks in 2020 targeted DeFi.
Thankfully, as PancakeSwap is a non-custodial DEX, it never holds your assets directly and so any hacker will not be able to steal anything from you. However, you should still be aware of any scamming attempt as there have been incidences of scammers messaging users advertising ‘50 BNB giveaway airdrops’ or ‘400 CAKE airdrops’.
Benefits
There are several benefits to using PancakeSwap, such as:
- Return on investment (ROI) calculator
- Easy to get started as no registration for exchanging and staking
- Non-custodial so tokens cannot be stolen if the platform is hacked
- An aspect of community governance as CAKE holders can vote on proposals
- Competitive fees compared to main alternatives like UniSwap and SushiSwap
- Range of tokens, farms and pools. Currently more than 600 tokens 90 farms and 25 pools
Drawbacks
PancakeSwap is not without fault and some of the drawbacks include:
- Risk of impermanent loss when staking
- No customer support or contact outside social media
- Possible slippage, which may affect large volume trades and reduce profits
PancakeSwap Verdict
PancakeSwap is a well-designed DEX that offers a variety of methods to earn capital with plenty of tokens, farms and pools. Having been audited by CertiK, it is a trustworthy and relatively secure exchange for users looking to capitalise on the volatile cryptocurrency market. While there is no customer support on the PancakeSwap website, there are several social media channels that can be used to contact the team or community for help. Remember to pay any tax you may owe from the earnings you make in your country. There are services online such as Koinly in the UK that can help you with this process.
FAQs
Is PancakeSwap Legit?
PancakeSwap has been audited by CertiK, showing that it is a reliable exchange. As it does not hold any of your assets, you are not prone to hackers stealing your capital if a hack occurs. PancakeSwap does not require you to login to an account and so it avoids the know-your-customer (KYC) policy that other exchanges may use, so you can maintain your privacy.
What Cryptocurrencies Can I Trade With?
There is a wide variety of cryptocurrencies that you can trade on PancakeSwap. As long as the crypto exists as a Binance Smart Chain token, it is offered on PancakeSwap. These include Elongate, Kabosu, USDT, Doge/Dogecoin, Ethereum, Zilliqa and Zeppelin Dao, as well as gems like Safemoon.
Is Source Code Available?
Yes, PancakeSwap provides frontend, toolkit and API info, as well as other repositories on its Github that you can access through the website and can use to fork PancakeSwap. The router V2 address can be found on the exchange’s website.
Can I Buy PancakeSwap Merchandise?
Yes, the exchange does make merch. On the PancakeSwap website, there is a range of clothing, cups, masks, etc. with team and bunny logos on. If you are not interested in anything on their website, then PancakeSwap provides a Google Drive link to the source png logo files so you can design your own t-
shirts or other items.
What Is Slippage?
Slippage is the difference in price between when a trade is ordered and when it goes through. This happens because trading is not instantaneous and the price of an asset can change in the time taken for the transaction to be processed.
Top 3 Alternatives to PancakeSwap
Compare PancakeSwap with the top 3 similar brokers that accept traders from your location.
- IG – Founded in 1974, IG is part of IG Group Holdings Plc, a publicly traded (LSE: IGG) brokerage. The brand-US offers spread betting, CFD and forex trading across an almost unrivalled selection of 17,000+ markets, with a range of user-friendly platforms and investing apps. For 50 years, IG has maintained its position as an industry leader, excelling in all key areas for traders.
- Interactive Brokers – Interactive Brokers (IBKR) is a premier brokerage, providing access to 150 markets in 33 countries, along with a suite of comprehensive investment services. With over 40 years of experience, this Nasdaq-listed firm adheres to stringent regulations by the SEC, FCA, CIRO, and SFC, amongst others, and is one of the most trusted brokers for trading around the globe.
- World Forex – World Forex is an offshore broker registered in St Vincent and the Grenadines, offering commission-free trading with a $1 minimum deposit and 1:1000 leverage. Digital contracts are also available, offering beginners a straightforward way to speculate on popular financial markets.
PancakeSwap Comparison Table
| PancakeSwap | IG | Interactive Brokers | World Forex | |
|---|---|---|---|---|
| Rating | 1.3 | 4.7 | 4.3 | 4 |
| Markets | Cryptos | CFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread Betting | Stocks, Options, Futures, Forex, Funds, Bonds, ETFs, Mutual Funds, CFDs, Cryptocurrencies | Forex, CFD Stocks, Metals, Energies, Cryptos, Digital Contracts |
| Demo Account | No | Yes | Yes | Yes |
| Minimum Deposit | $1 | $0 | $0 | $1 |
| Minimum Trade | $1 | 0.01 Lots | $100 | 0.01 Lots |
| Regulators | – | FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB, AFM | FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA, AFM | SVGFSA |
| Bonus | – | – | – | 100% Deposit Bonus |
| Education | No | Yes | Yes | No |
| Platforms | Own | Web, ProRealTime, L2 Dealer, MT4, TradingView, AutoChartist, TradingCentral | Trader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, eSignal, TradingCentral | MT4, MT5 |
| Leverage | – | 1:30 (Retail), 1:250 (Pro) | 1:50 | 1:1000 |
| Payment Methods | 1 | 6 | 6 | 10 |
| Visit | Visit | Visit | Visit | Visit |
| Review | – | IG Review |
Interactive Brokers Review |
World Forex Review |
Compare Trading Instruments
Compare the markets and instruments offered by PancakeSwap and its competitors. Please note, some markets may only be available via CFDs or other derivatives.
| PancakeSwap | IG | Interactive Brokers | World Forex | |
|---|---|---|---|---|
| CFD | No | Yes | Yes | Yes |
| Forex | No | Yes | Yes | Yes |
| Stocks | No | Yes | Yes | Yes |
| Commodities | No | Yes | Yes | Yes |
| Oil | No | Yes | No | Yes |
| Gold | No | Yes | Yes | Yes |
| Copper | No | Yes | No | No |
| Silver | No | Yes | No | Yes |
| Corn | No | No | No | No |
| Crypto | Yes | Yes | Yes | Yes |
| Futures | No | Yes | Yes | No |
| Options | No | Yes | Yes | No |
| ETFs | No | Yes | Yes | No |
| Bonds | No | Yes | Yes | No |
| Warrants | No | Yes | Yes | No |
| Spreadbetting | No | Yes | No | No |
| Volatility Index | No | Yes | No | No |
PancakeSwap vs Other Brokers
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