Another food-themed DeFi protocol? You know it. PancakeSwap is a Binance Smart Chain-based DEX launched by anonymous devs with a penchant for breakfast foods and rabbits.
The food-based farming craze has captivated participants in the crypto space for months. In the latest wave of DeFi protocols, we’ve seen numerous platforms emerge that allow users to stake their funds in return for the protocol’s tokens.
What is PancakeSwap?
The PancakeSwap exchange UI.
The PancakeSwap exchange
Those pools are filled with other users’ funds. They deposit them into the pool, receiving liquidity provider (or LP) tokens in return. They can use those tokens to reclaim their share, plus a portion of the trading fees.
So, in short, you can trade BEP-20 tokens, or add liquidity and earn rewards. There are also other features we’ll cover later.
You’ll find these LP tokens in several flavors – if you added, say, BUSD and BNB to the pool, you’ll receive BUSD-BNB LP tokens in return. BETH and ETH? You’ll get BETH-ETH LP tokens.
Farming and staking on PancakeSwap
But wait, there’s more! PancakeSwap also allows you to farm its governance token – CAKE.
On the farm, you can deposit your LP tokens, locking them up in a process that rewards you with CAKE. Which LP tokens can you deposit? Well, the list is quite long, but here’s a taster of some of the most popular ones:
- CAKE – BNB LP
- BUSD – BNB LP
- BETH – ETH LP
- USDT – BUSD LP
- USDC – BUSD LP
- DAI – BUSD LP
- LINK – BUSD LP
- TWT – BNB LP
The rewards don’t end here, however! You can earn even more by staking your CAKE in SYRUP pools.
So you’ve deposited some funds to receive LP tokens, and you’ve used them to farm CAKE. From there, you can stake your CAKE and earn other tokens through special staking pools.
But wait, we hear you say, isn’t MetaMask an Ethereum wallet?
Once you’ve got that set up, you can unlock your wallet to reveal additional information. You’ll see that different LP tokens promise different returns. So how can you add liquidity?
Again, if you’ve used any AMM previously, then you know the drill. To farm CAKE, you need to first add liquidity to the exchange.
Adding liquidity to PancakeSwap.
As with ERC-20 tokens, you’ll need to approve the movement of BEP-20 tokens – this is what allows the contract to withdraw them on your behalf. When you click Approve Contract, a popup will ask you to confirm the transaction and display a fee.
Once that transaction confirms, simply select the amount you want to stake and confirm it. You can navigate away from the page and come back at any time to check how much CAKE you’ve earned – if you want to harvest your rewards at any point, click on Harvest and confirm the transaction.
SYRUP pools – stake CAKE, earn new tokens.
Once again, you need to approve the withdrawal of your tokens. Hit Approve CAKE to do so. When that has been approved, you’ll need to select the amount of CAKE you want to stake.
Now that the CAKE has been staked, you’ll be earning the reward token of the pool passively. If you’d like to cash out your rewards, click on Harvest.
That’s great, but what else can you do with your CAKE? Well, you can enter a lottery on PancakeSwap.
Try your luck in the PancakeSwap lottery.
Each lottery session takes 6 hours. One ticket costs 10 CAKE, which will give you a random four-digit combination of numbers between 1 and 14, for example, 12-8-4-3. To win the jackpot (50% of the entire lottery pool), the numbers in your ticket need to match all four numbers in the same position as the winning ticket.
What if you don’t match all four? No worries. You also win rewards if two or more of your numbers are in the same position as the numbers in the winning ticket.
Wait, so you can do even more with PancakeSwap? Yes, you can win special NFTs.
Win some of the cutest NFTs on BSC.
If you’re chosen as a winner of an NFT, you can trade it for the CAKE value it represents or keep the cutie in your wallet as a collector’s item.
Teams & profiles
Looking for more gamification? Teams and profiles are your chance. You can show off your stats by creating a public profile, and join one of the teams to compete for team achievements!
Is PancakeSwap safe?
PancakeSwap has been audited by CertiK.
Does that mean it’s completely safe to use? No. Depositing funds into a smart contract always carries the risk of bugs, even for audited and highly reputable projects. Never deposit more than you can afford to lose.
Ethereum may have kickstarted the DeFi trend, but initiatives like PancakeSwap suggest that the wave of innovation is destined to spread to other chains.