PancakeSwap (CAKE) Research

PancakeSwap (CAKE) Research Details

PancakeSwap (CAKE) PancakeSwap

INTRODUCTION

PancakeSwap is purely a decentralized exchange or DEX in short. But unlike Uniswap, which operates on the Ethereum network, PancakeSwap operates on Binance Smart Chain. Pancakeswap is the creation of Binance, which provides excellent transaction performance and very minimal levels of transaction fees.

Improved speed and low-cost Binance Smart Chain have made popular choices for many new projects. But the important thing to note here is that PancakeSwap has some technical designs that make it an effective investment experience for users.

Therefore,the long and short term that PancakeSwap is a domain exchange that provides cheap and fast trading without the involvement of central authorities. It is an automated market maker (AMM), like other exchanges that share a little with their name. That means it uses the pools to spend money while rewarding providers for donating these assets.


HISTORY AND FOUNDER

Although PancakeSwap was launched in September 2020 by anonymous developers, the team is known to consist of over a dozen contributors, including two co-leads and engineers. PancakeSwap is partially community-driven and CAKE owners can vote for governance proposals using the PancakeSwap voting portal.

What makes it different during the launch is that PancakeSwap is built on Binance SmartChain (BSC), which offers faster and cheaper transactions compared to Ethereum. At the time of the launch of PancakeSwap, Ethereum was troubled by expensive and slow transactions as DeFi's mainstream moment area in 2020 was driving huge demand for transactions. Almost all DeFi applications were based on Ethereum at that time.


REASON TO BUILD THE PROJECT

The DeFi market was already in full swing, leading to higher gas costs and some congestion in the Ethereum network. The market had attracted so many investors to the Ethereum network that it made it difficult to keep it up.

Therefore, it was during this time of turmoil that PancakeSwap entered the market, offering cheaper network fees powered by Binance Smart Chain. PancakeSwap also offered a low exchange rate of 0.2% while the industry rate is 0.3%. Following its low-cost model, PancakeSwap has seen rapid growth in both trading volume and total value locked (TVL). It became one of the largest trading platforms in the industry by trading volume in February 2021, teaming up with AMM pioneer and Ethereum darling Uniswap.


BASE OF PROJECT

PancakeSwap is a type of DEX known as an automated market maker (AMM). This means that there are no order books, bid/request system, or limit/market orders.

As an extended app (DApp), PancakeSwap is usually accessed through a supported Web3 wallet, such as MetaMask, TrustWallet, or Wallet Connect. Once designed to support Binance Smart Chain, these funds are used to interact with PancakeSwapsmart contracts using the accurate PancakeSwap terminal.

The platform is sponsored by PancakeSwap Treasurer, who currently receives 15% of all trading revenue generated. According to official documents, funds from the treasury may be used for a variety of purposes related to the maintenance and upkeep of the platform. These include salaries, auditing, prizes, bonuses, hosting, etc.


USE CASE

The use case of Pancake are:

·       Initial Farm Offerings (IFOs) -Similar to Initial DEX Offering (IDO), PancakeSwap allows users to purchase new token projects before they start public launch. Some projects implemented using this method include Ditto, Soteria, and Hot Cross.

·       Yield Farms - PancakeSwap allows users to earn more revenue by depositing tokens supported by a liquidity provider (LP) on one of its many yield farms. By participating in a yield farm, users get a CAKE yield from their LP tokens.

·       Syrup Pools - Syrup Pool is just like staking PancakeSwap. By using Syrup Pools Pools, users can place a variety of BEP-20 tokens to earn a yield - either by CAKE or another reward token.


MAJOR NEWS AND EVENTS

DATE

NEWS/EVENTS

IMPACT

23/04/2021

PancakeSwap enhances Binance Smart Chain's lead over Ethereum in trading

+58% Increase

16/02/2021

PancakeSwap brings tremendous DeFi Volumes to Binance Smart Chain

+156% Increase


CONCLUSION

Binance Smart Chain is growing rapidly as developers take advantage of its lower payouts and faster transactions compared to Ethereum. In April 2021, Binance revealed that the platform performed 4.9 million jobs in a single day, or three times the amount Ethereum once held per day.

PancakeSwap doesn't have the same daily volume measurement as Uniswap or SushiSwap, the two largest DEXs on Ethereum, but given the short years of Binance Smart Chain, it's already very popular.

If the decentralized Binance (dapp) app platform continues to grow and attract more developers and users alike - and the rising cost of Ethereum gas and network congestion continues then PancakeSwap could wage even more vigorous action against rival trade on time.


DISCLAIMER

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto products are currently unregulated and subject to market risk. Please seek independent financial advice or do your own research before investing.