The Uniswap of Binance Smart Chain, PancakeSwap just reached 500M in TVL and more than 100M daily volume. Let’s take a look at the numbers as this platform has been growing at an amazing pace. https://pancakeswap.info/home
I have wrote about the PancakeSwap before A Look Into PancakeSwap | The Binance Smart Chain Uniswap | Supply, Market Cap, Inflation. The Binance Smart Chain started at the end of August 2020, and the PancakeSwap at the end of September 2020. One of the best features here are the low fees. Its Eth compatible so you can use the apps with Metamask.
One of the major points in the post above was the massive inflation of the CAKE token of more than 250M tokens per year, with a current supply of around a 100M. There are token burns but still the current inflation is more than 100% per year. Maybe at some point it will be lowered, as it was done once in the past.
This said, at the time of writing the previous post, the CAKE token was around 0.5$, and now is around 2.5$, or x5 in price in a month time. Obviously when there is a high growth high inflation can be offset fast. Still a long term (years) sustainability would be a challenge if changes are not made.
Bellow is the usual chart, equivalent to Uniswap.
As we can see from the chart there was a massive growth in the first month where the liquidity on the platform reached almost 300M, then a consolidation period and now a high growth again reaching a 400M in liquidity.
How can the locked value be more than 500M, if the chart above is showing a 400M?
The answer syrup pools.
PancakeSwap has this thing called syrup pools, where you stake CAKE and earn another token. The CAKE token is acting as a miner token for the other tokens. This ability to earn other tokens while staking CAKE is one of the use cases for the CAKE token that actually give it value. The more of these other tokens, the more they will be pegging each other.
The difference between the 400M above and the 600M in total locked value is in the syrup pools.
Bellow is the chart for the top pairs on Pancake.
The BNB-CAKE pair is dominant here with 74M in liquidity, followed by the BNB-BUSD pair.
The high liquidity in the BNB-CAKE pool means that the CAKE token is starting to peg its value to the BNB token to some degree.
The PancakeSwap platform has the standard method of providing liquidity to the pairs above, where you will earn a fee from the pools. In this way you will be earning the native tokens that you have pooled.
Then there is this option where you stake your liquidity in a farm and you earn CAKE on top of it. What this means you give up your fees and native tokens from them in exchange for CAKE. Now these farm pools are usually heavily subsidized in CAKE tokens with more than 100% APY, but in CAKE, not in the tokens that you have pooled.
The above is something to be aware of, provide liquidity and earn from the fees in the tokens you have pooled, or stake that liquidity for higher APY but of course the risk of the CAKE token going down in value as well. The good thing with the BSC apps is the low fees so you can exchange your profits in a token that you prefer.
At the end the chart for the daily trading volume.
This chart is more on the upside than the total value locked, meaning the activity on the platform is growing. Because of the low fees some of the volume might be faked, but still it looks like the overall volume is up.
- 600M total locked value
- 150M daily trading volume
- 18k daily active wallets
- 70k monthly active wallets
If we compare these numbers with Uniswap where there is almost 4B in TVL, 1B in daily volume and around 40k we will see that Pancake has smaller numbers but still not tiny. Especially having in mind that it has been around for only a few months. We will see how things goes in the future.
I’m personally pooling on the platform in three pools, CAKE-BNB, BNB-EGLD and a stable coin pool. All the liquidity is staked and earning cake and I’m taking out profit and converting it on a regular basis. In the last months the pools have performed amazingly good, that doesn’t mean it will continue like this.
All the best