Pancakeswap
So you´ve heard about pancakeswap and want to get started. Pancakeswap is a defi exchange on the Binance Smart Chain (BSC). The exchange is very similar to Uniswap which runs on the Ethereum network, which means it offers lower trading fees and transactions are faster.
What is pancakeswap?
Pancakeswap is a decentralized exchange that allows you to trade tokens and cryptocurrencies without any middleman. It is built on smart contracts that have been deployed on the BSC. BSC or Binance Smart Chain is a. blockchain platform developed by the crypto exchange Binance. Binance operates a centralized exchange, but it doesn’t control pancakeswap. Pancake swap was developed by a group of developers whos anonymous.
The exchange is a fork from Sushiswap which is a fork from Uniswap.
How to get started with Pancakeswap using Trustwallet (iOS)
In order to get started on your favorite iOS device, you need to download Trustwallet on your device. After you downloaded the app and saved your secret phrase securely you need to fund your Trustwallet. You can do this by either buying/trading BNB on Binance or buy directly within the app. After you have your BNB you need to Swap it to Smart Chain. Make sure to keep a portion of your BNB for gas fees.
When you have your Smart Chain BNB you can start your favorite web browser on your iOS device and head over to pancakeswap.finance
When you are on the website click on the Connect button in the upper right corner. A pop-up will appear that lets you connect your wallet.
Since iOS doesn’t support the in-app browser they also removed the support for connecting your Trustwallet directly to pancakeswap. We need to click on “Walletconnect”, which allows us to connect our Trustwallet to the exchange.
Click on Trustwallet and your Trustwallet will popup and ask for permission to connect to the Pancakeswap exchange.
Click on connect and your wallet will be connected to the Binance Smart Chain.
The status will show as Online and you can disconnect at any time. Now you can open up your web browser again and start using Pancakeswap on your iOS device.
How does it work?
Pancakeswap is built on an automated market maker system that relies on liquidity pools that are fueled by users. This enables fast crypto swaps rather than having an order book and find someone else who wants to swap the token for you.
This means that users can stake their coins in a pool which enables them to earn rewards from fees. This is a good way to earn passive income.
Pancakeswap offers “liquidity pools” which means you help the dex with liquidity and also so-called “syrup pools” where you stake your CAKE (the native token of the dex) in order to earn other tokens.
Pancakeswap transaction fees
All exchanges have trading fees and even though pancakeswap is a decentralized exchange (dex) they still charge trading fees. Users that stake their coins into the liquidity pools receive their LP token rewards on top of the accumulated trading fees on the platform.
Pancakeswap charges 0.2% for users. In these fees, 0.17% is redistributed to the liquidity providers and 0.03% is allocated for burning by the treasury.
Since the platform is decentralized, this distribution of the fees can be revised by the stakers as necessary.
Cake
The exchange has its own currency which is called Cake. The currency is used within the platform to make it easier to swap between tokens. Cake is also the currency you use in order to provide liquidity to the DEX.