PancakeSwap (CAKE): Crypto Exchange and Token Overview
A decentralized platform (DEX) is a platform where traders can transact without a regulatory intermediary. This allows you to trade directly with other participants without transferring coins to a single server and without fear of blocking or prohibitions by the administration. At the end of August 2021, the PancakeSwap cryptocurrency exchange ranked first in the DEX platform rating. According to the organizers, the capitalization of the project exceeded $ 6 billion, and on average, transactions worth $ 1.3 billion were carried out per day.
PancakeSwap Marketplace
The PancakeSwap platform operates as an Automated Market Maker (AMM). This means that the service does not have a single control center and order book. Crypto traders connect their wallets to the site and deposit assets into liquidity pools. Applications are processed automatically using smart contracts, which block the tokens and coins participating in the exchange.
History
PancakeSwap is not a legal entity. This project was founded by a group of anonymous developers. The DEX exchange was launched on September 20, 2020. A few months later, the project became the leader of decentralized platforms in terms of capitalization, transaction volume, and the number of traded assets. In August 2021, the developers announced the launch of a marketplace for transactions with NFT.
Regulation
The PancakeSwap crypto exchange is decentralized and has no administration or other governing body. All decisions on the development of the project are made by traders on voting. For this reason, the activities of the platform cannot be restricted by any regulatory authorities. To trade, a user just needs to install a wallet and connect it to the system protocol.
Exchange Token
Ecosystems of decentralized platforms usually use special native cryptocurrencies. They can be used to pay for services, exchange, and other activities.
On the PancakeSwap crypto exchange, this token is CAKE. This digital asset uses the BEP-20 standard and operates on the Binance Smart Chain blockchain.
The main purpose of the native token is the settlement with liquidity providers. Traders deposit digital assets into one of the pools. In return, the liquidity provider receives special LP-tokens corresponding to the funds transferred to the exchange.
For example, if an investor sends USDT and BNB, they are credited with an asset called USDT-BNB LP. Liquidity tokens can be exchanged for the corresponding number of base coins at any time. If a crypto trader wants to increase profits, he transfers these assets to staking, receiving in return an additional reward in the form of CAKE.
In addition, native tokens have several uses on the marketplace:
- voting token;
- means of payment for the purchase of NFT;
- investment asset.
Additional Services
In addition to trading and investment operations, traders can perform the following actions:
- participate in the lottery;
- suggest ideas for the development of the project.
Lottery
Members can buy 6-digit tickets with CAKE tokens. A drawing takes place daily. The winning combination is determined randomly. The prize fund depends on the activity of the players and the CAKE rate. In August 2021, the jackpot was approximately $ 50,000.
Voting
On decentralized platforms, decisions are made by the majority of native token holders. All CAKE owners can publish their ideas for the further development of the project. On the page “Voting” there is a button “Make an offer,” which leads to a form containing a description of the innovations. In addition, CAKE holders have the right to speak out about other members’ ideas.
PancakeSwap in August 2021 ranked first among DEX exchanges in terms of capitalization and average daily trading volume. This project was founded in 2020 by a team of anonymous developers. PancakeSwap has the following advantages:
- Complete anonymity of clients.
- Large selection of trading pairs.
- Additional services for earning money (farming, pools, lottery).
