What is PancakeSwap? Learn about products and how to trade at PancakeSwap

Pancakeswap is one of the famous digital currency exchanges on the market today. Join Finhay to learn detailed information about this exchange, its advantages and disadvantages as well as how to participate effectively in the following content.

What is PancakeSwap?

Pancakeswap is a decentralized cryptocurrency exchange, operating under the first automated market making mechanism (AMM DEX) of the Binance Smart Chain ecosystem. Pancakeswap floor is where BEP20 standard token exchange activities (the latest Binance Smart Chain token standard) take place.

Pancakeswap exchange has 2 types of users:

• Liquidity Providers: They contribute their assets to the Pool
• Traders: They Swap assets back and forth in the Pool according to the predetermined algorithm in the smart contract (Smart Contract). This is different from other exchanges that follow the Order Book mechanism.

Appearing for the first time in September 2020, the Pancakeswap exchange is considered an AMM Fork (Auto Market Marketer) from Uniswap V2 (Automatic Market Creation Protocol).

Thanks to good operating efficiency, Pancakeswap is always in the top 3 DEXs with the largest trading volume in the market. The exchange has become the liquidity center for the entire Binance Smart Chain ecosystem – similar to Uniswap (the liquidity center of the Ethereum system).

• AMM is a market making system that helps buy/sell orders to be matched without going through the order book. You just need to contribute assets to the pool and the orders will be matched immediately – the price is adjusted according to the predetermined formula of the smart contract.
• The confrontation between the two DEX liquidity centers Pancakeswap and Uniswap is increasingly heated – investors are the ones who benefit when you have access to more opportunities.

Featured products on the PancakeSwap floor

Trade – AMM trading platform

With an interface quite similar to Uni Swap and Sushi Swap, Pancakeswap will be where you are allowed to trade BEP20 Tokens on the platform, and also on the BSC network.

How to trade on Pancakeswap: Transactions do not require placing buy or sell orders and use Liquidity Pool to Swap tokens, everything is done automatically according to smart contracts. The exchange provides Liquidity Pool to create liquidity for other users. All activities take place according to the floor’s automatic algorithm, without being affected by a third party.

• Pancakeswap is a paradise for investors who want to Hold Coin on their wallet. You don’t waste too much time, just go to Swap once and the money will be returned to your wallet, you don’t have to make any other transactions.
• Changing back and forth between BEP 20 Tokens on the same platform is more convenient and safer for investors. No need to transfer to the exchange, you can easily withdraw from one wallet and then transfer to another wallet when needed.

Your job is to analyze the market, find the right time to Swap to find profits.

Yield Farming

This is a product where users use coins with available liquidity for the Pancakeswap exchange. There are a total of 27 liquidity tools, you can easily send FLIP Tokens to create Yield Farming and create CAKE. For each CAKE created, the reward is divided in the Pool (pool or mine).

Each Pool has different CAKE times and amounts depending on the number of people sending Tokens to the Pool. The more CAKE price increases, the more profit investors will make and vice versa, you will bear the risk if the price drops.

Staking Pools

This is where new projects can advertise themselves to the Pancakeswap trading community. The project will distribute a portion of Tokens to CAKE Holder Staking Pools: One is the Core chosen by the Pancakeswap team, the other is chosen by the community (Community).

If the project you choose wins, it will be on the list of Swap, Token price,… and thereby earn profit for yourself. Many investors choose to participate in staking pools because of the opportunity to receive compound interest thanks to coins from new projects.

Note: this product will be truly suitable if you are an investor who is willing to play, has consistency, and is not afraid of risks.

Lottery

This is a form of lottery based on reputable Blockhash on Pancakeswap. Each investor can buy a lottery ticket with 4 random numbers. A Lottery round lasts for 6 hours. If your ticket is lucky enough to win, the prize distribution will be as follows:

• If multiple people win the same prize: The total prize is divided equally by 60% to the person who wins all 4 numbers in the correct order, 20% to the person who wins 3 numbers in the correct order, 10% to the person who wins 2 numbers in the correct order and burned. 10% of total remaining prizes.
• In case there is only 1 winner, 100% of the prize will be distributed to that person.

Note: if no one wins prize 3 (winning 2 numbers), 20% of the reward is burned. Burning Coin helps reduce the risk of inflation on the exchange. Since then the price of CAKE currency has been pushed higher.

Voting and Analytics

At Voting, the community can vote and propose ideas for cryptocurrency projects to be launched. There are 2 types of proposals:

• Core – Pancake Swap proposal will be implemented when the community accepts it.
• Community – community suggestions, made by the participants themselves. If this proposal has strong support, the Pancakeswap exchange team will upgrade to Core.

For Analytics, investors consider indicators of liquidity, price, trading volume, currency pairs, etc. From there analyze market trends and make the best investment choice.

Advice for investors: Do not rely too much on this product, but need to combine it with a lot of other information on the market along with your own experience, ability to evaluate and predict.

IFO

This is a product in the form of fundraising for the project – Initial Farm Offering. Made for BNB, CAKE, LP coins. When participating, investors can buy newly launched tokens through Yield Farming.

To participate, you need at least 1.5 CAKE coins and the amount of BNB as a fee. Users need to set up their profile with an NFT coin as their avatar. Then access IFO on Pancakeswap, find the project you want to join and stake CAKE coin. There are two options for investors:

• Basic Sale: Pool for wallets with profiles can only provide $100 CAKE so it’s quite limited, you should join when the IFO period starts.
• Unlimited Sale: You can freely stake Cake coins, the system automatically calculates the amount for you similar to Lauchpool on Binance. This is a suitable place for people with large capital (the whales of the market).

How to trade on PancakeSwap

To trade on Pancakeswap in particular, Smart Binance Chain’s decentralized exchanges, users need BNB coin as a fee. BNB coins can be purchased directly on Binance or other exchanges. Then transfer money to a reputable e-wallet and link to the Pancakeswap exchange and you’re done.

Instructions for registering an account

First, visit the official Pancakeswap website.

Select Connect Wallet, after success, you can make transactions and use the exchange’s products. Thus, the most important step of registering an account is preparing an e-wallet:

For Trust wallet:

• Download the wallet to your phone, install and register an account.
• Select to open Trusted Wallet > click Dapps
• Select “Popular” > “Pancakeswap”. At this time, the interface displays the Pancakeswap page, select “Connect Wallet”.
• Connect successfully, deposit money into wallet, choose to exchange Tokens or trade according to strategy.

For MetaMask wallet:

• Register an account directly on the website or download to your phone > select Create quick wallet.
• Visit Pancakeswap website > Connect Wallet > select Metamask wallet
• Enter basic information to set up information > success > transaction now.

In addition to the above two types of wallets, the market also has many other e-wallets such as Binance Chain, Coin98, WalletConnect, etc. Depending on your preferences or intentions, you can choose the appropriate wallet type.

Instructions for trading coins on PancakeSwap

After successfully setting up the wallet, users proceed to exchange money for Tokens on the exchange:

• Select Pancakeswap Exchange > Unlock Wallet
• Find and select the coin you want to exchange > Enter the amount you want to exchange > Swap > Confirm exchange > Complete.

There are popular tokens that are traded regularly on Pancakeswap such as BEP20, BNB, BUSD, CAKE, etc. Familiar exchange pairs such as BTCB and ETH are also very popular with huge trading volume every day.

Important notes when trading on PancakeSwap

For Pancakeswap, you need to pay attention to the 25% transaction fee. In case the wallet only has enough money corresponding to the Coin, the transaction will not be performed because there is not enough fee to pay to the exchange.

Transaction processing speed on the floor is high from 55-60 seconds/transaction. Compared to the Ethereum network you need to wait 5 minutes for a transaction to confirm and there is a fee of 20 USD for most transactions. Therefore, the Pancakeswap floor becomes more attractive to investors.

Besides: Part of the transaction fees on Pancakeswap is used to pay interest to Staking participants, so you should not miss out on the exchange’s Staking Pool and IFO products. Invested more than 350,000 USD, tokens traded on exchanges on other networks (ERC, BEP2,…) are required to switch to BEP-20.

Finding and choosing a reputable and safe trading floor helps protect finances, investors feel secure and confidently conduct their profit-seeking transactions. Pancakeswap platform will be a great choice for you to experience cryptocurrency trading today.

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