PancakeSwap (CAKE) – All you need to know

What is PancakeSwap?

PancakeSwap is a decentralised exchange (DEX) that serves a key role in the world of decentralised finance (DeFi), processing hundreds of millions of dollars in cryptocurrency trades every day and serving millions of users.

Its cryptocurrency, CAKE, is primarily used to provide voting rights to token holders, so they can help make decisions regarding the development of PancakeSwap. In addition, sticking with the sugary theme, CAKE can be staked for rewards on PancakeSwap in something called a SYRUP pool. 

The key part of PancakeSwap’s appeal is its decentralised nature. One of the key themes in the crypto narrative is taking back financial power from traditional authorities like banks, and PancakeSwap achieves this by using liquidity pools rather than a traditional order book.

Liquidity pools are separate digital groups filled with different cryptocurrency tokens. This means there are always tokens available to exchange, providing the liquidity needed for the platform to function effectively. 

PancakeSwap was founded by a group of anonymous developers in September 2020. Its key marketing points were low transaction fees, which stood at 0.2% rather than the industry standard of 0.3%. This low-fee model was enabled by its choice of blockchain: the Binance Smart Chain (BSC).

A brief history of PancakeSwap

PancakeSwap hasn’t been around for that long, but there have already been plenty of major events in its history.

  • The platform was founded by an anonymous group of developers in September 2020. Unlike most DEXs, which are built on Ethereum (such as Uniswap), the developers opted for the Binance Smart Chain courtesy of its faster and cheaper transactions. 
  • PancakeSwap’s lower transaction fees helped it achieve mainstream popularity, especially in crypto trading circles. 
  • By the start of 2021, it had become one of the world’s largest DEXs by trading volume. Now, thanks to its success, PancakeSwap is making strides into prediction markets, lending and borrowing, and margin trading, becoming an all-in-one DeFi package. 

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