The digital world gets sounded more by the growth of DeFi. There are numerous DeFi protocols in the market that provide for a greater share in the global revenue. In those, food-themed DeFi Protocols are most trending.
Here let us look at one of the famous Food-Themed DeFi Protocol “PancakeSwap” and how it rules the DeFi Space.
PancakeSwap is one of the famous DeFi based Protocol which aims to provide Automated Market Making (AMM) by being a #1 liquidity provider. This open-source DeFi based exchange is built on the Binance Smart Chain (BSC) through which the platform users can swap BEP-20 tokens.
CAKE is the native token of PancakeSwap and the users can swap, add liquidity, farm, yield, stake, and win CAKE Tokens through lottery.
PancakeSwap Exchange Specification
Type - DeFi Based Exchange
Native Token - CAKE Token
Blockchain Network - Binance Smart Chain (BSC)
Token supported for Swapping - BEP-20
Exchange Model - Automated Market Maker (AMM)
An Automated Market Maker is a decentralized exchange protocol that doesn't need an order book but relies on the mathematical formula to set the price for the assets. The price of the assets is fixed according to the pricing algorithms. This pricing formula can vary according to the DEX protocols.As PancakeSwap works on the AMM model, which means the users can trade their digital assets on the platform at any time even if their order book isn't matched with anyone else.
Instead, the trading occurs against liquidity pools.
These liquidity pools are filled with user's funds. The users deposit those funds into the pools just to receive a liquidity provider token or LP Token in return. These LP tokens can be used to reclaim shares and trading fees.So, in short, anyone can trade BEP-20 tokens or add liquidity to PancakeSwap and earn LP tokens as rewards.
These LP tokens are in several ways. For Example: if you add BUSD and BNB to the pool, you will receive BUSD-BNB LP tokens as rewards in return and For BETH and ETH deposits, you will get BETH-ETH LP tokens in return.
Popular Features of PancakeSwap
Listed here are some of the features that attract users to the platform called PancakeSwap.
PancakeSwap is an Open Source DeFi protocol designed specially for swapping BEP-20 tokens. Anyone can use this platform and swap their own BEP-20 token on the exchange which is built on the Binance Smart Chain.
PancakeSwap allows you to farm its own native token called CAKE.The farming feature of PancakeSwap allows users to deposit their LP tokens and lock them up and earn CAKE tokens as rewards. Here is the list of tokens that PancakeSwap supports for farming.
CAKE -BNB LP
BETH -ETH LP
USDT -BUSD LP
BUSD -BNB LP
USDC -BUSD LP
DAI -BUSD LP
TWT -BNB LP
Not only through farming, but you can also even earn more through staking your own CAKE tokens in SYRUP Pools.
This SYRUP pool is for CAKE, where one can stake their CAKE to earn more CAKE Tokens. You can also earn more tokens by staking CAKE.
As the PancakeSwap exchange works on the AMM model, the traders can swap tokens without any order books. To farm CAKE tokens, one must first add liquidity to the exchange.
Select the token pair that you wish to deposit and add liquidity to the exchange. Know completely about the impermanent loss, before adding liquidity to the pool.
Once you have got LP tokens, it's time to stake those and earn CAKE tokens. When you have got a CAKE token, you can stake those in SYRUP pools.
When you stake a CAKE token, you will be earning the rewards of CAKE tokens.
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