So far, 2021 has been a very active year in crypto!
One of note has been the rise of exchanges of cyrpto tokens such as PancakeSwap. PancakeSwap, pancakeswap.finance, is a Binance Smart Chain-based DEX launched by anonymous devs with a penchant for breakfast foods and rabbits. It looks a bit like Ethereum's SushiSwap (community governance, the ability to farm liquidity provider tokens), but also incorporates many other features that let you earn rewards.
The purpose of PancakeSwap is to provide a decentralized platform for people to trade cryptocurrencies as well as earn rewards. The platform is built on a smart chain, which allows users to transact directly with each other. It also features an asynchronous payment system, which enables users to pay instantly in reality even if they are not online at the time.
They are re-launching a lottery and have a very active prediction section allowing you to play to win or lose portions of the prediction pot based on what BNB cryptocurrency price finishes at when the timer hits zero.
What is a DEX?
A DEX, or a Decentralized Exchange, is a system of trading where tokens are traded directly between two parties in a peer-to-peer fashion. This bypasses the larger centralized exchanges that charge high fees to exchange tokens. It also means that in the event of an exchange hack, the traders will not lose their holdings.
What is a Smart Chain? A Smart Chain is a system that allows for the creation of tokens and their use on a blockchain. Users can create tokens on a Smart Chain, and then use these tokens like any other coin. They can be sent or received in exchange for goods or services, and used to make payments.
How To Use Pancakeswap!
Start by creating an account at pancakeswap.finance. Then go to the market page and pick a token you wish to purchase, click the button labeled “Buy Now” while your wallet has enough funds to cover that purchase.
What is PancakeSwap?
Since Binance has launched a smart chain based platform, PancakeSwap has rebranded and created a community governance system where users can be rewarded for making suggestions on how to develop the platform and earn pancake coins. Pancakeswap randomly allocates pancake coins as rewards for making suggestions on their voting dApp.
How does PancakeSwap work?
PancakeSwap allows users to transact directly with each other, and unlike other decentralized exchanges, PancakeSwap is not a Counterparty-based protocol.
Instead of acting as a miner or validator, PancakeSwap acts as a bridge between Binance market makers and liquidity providers. The basic idea is that liquidity providers will purchase BNB tokens in order to earn from the rewards they earn from trading activity on the platform. For example, Alice might agree to buy 10 BNB tokens when she sees that Bob wants to buy 100 of them. Bob is a market maker and already has 100 BTC which he wants to trade for BNB. The trade activity will serve as the purchase-side liquidity, so Bob might also agree to exchange 0.1 BTC for 1 BNB instead of 10 BNB at a time, if not enough liquidity exists in the system.
Conclusion: This is not a full explanation of all PancakeSwap features and processes. If you are interested in learning more, you can visit their Reddit or Medium to find out more information.
Pancakeswap is a decentralized exchange for Binance cryptocurrency, with no central authority, therefore eliminating market manipulation and fraud. The Pancakeswap platform provides users with the ability to interact directly with each other as well as earn rewards. It also features an asynchronous payment system, which enables users to pay instantly in reality even if they are not online at the time.
Disclaimer:
Cryptocurrencies are highly speculative and risky investments. It is important to do your research before choosing any coins or tokens you want to invest in. Cryptocurrencies can still be a solid investment, but you should not expect huge returns in the short term.
This post is by no means meant to discourage anyone from investing in cryptocurrencies and blockchain technology. I am merely trying to convey that there are a lot of unknowns and high risks involved with this new technology. It may take years for cryptocurrencies to catch on, but there is also the possibility that they will never break into mainstream use at all.
I am not an expert in economics, trading, finances, or crypto trading and am not providing any advice.
