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PancakeSwap (CAKE)

PancakeSwap (CAKE)

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A Decentralized Exchange Purpose-Built to Enable the Swapping of BEP-20 Tokens.

PancakeSwap (CAKE) Fact Sheet

  • PancakeSwap is a BNB Smart Chain-based DEX that features AMM functionality and enables users to swap tokens based on the BEP-20 token standard.
  • The logo used for the project represents a pancake, which follows the theme of the entire service, all of which are filled with colorful backgrounds and charts.
  • Unlike competitors such as Sushi (SUSHI) and Uniswap (UNI), which are built on top of the Ethereum (ETH) blockchain, PancakeSwap (CAKE) is built on the BNB Smart Chain, ensuring that it fills a different role within an entirely different ecosystem.
  • PancakeSwap also features community governance, which gives all of its users the ability to essentially farm liquidity, provides tokens, and even incorporates other specific features that make it stand out.

CAKE Historical Data Price Chart in the U.S. Dollars (USD)


PancakeSwap (CAKE) Historical Data Price Chart in the U.S. Dollars (USD). Source: TradingView

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What is PancakeSwap (CAKE)?

PancakeSwap is built on top of the BNB Smart Chain.


It is important to address the fact that on February 15, 2022, the entire ecosystem surrounding the Binance exchange and blockchains underwent a rebranding process, as showcased here:

  • Binance Chain was rebranded to BNB Beacon Chain.
  • Binance Smart Chain was rebranded to BNB Smart Chain.


With that in mind, PancakeSwap (CAKE) is a BNB Smart Chain-based decentralized exchange (DEX) that was built with the automated market-making model (AMM) as a means of enabling users to swap tokens that follow the BEP-20 token standard.


PancakeSwap has been historically compared to Sushi (SUSHI) and Uniswap (UNI), which are built on top of the Ethereum (ETH) blockchain. However, while it does share similarities, it is actually built on top of the BNB Smart Chain.


The similarities come in the fact that PancakeSwap is a decentralized exchange (DEX) that is developed to facilitate the process of swapping BEP-20 tokens.


BEP-20 is a Binance token standard that has to be followed for any project and cryptocurrency that gets built on top of the BNB Smart Chain.


This is an abbreviation that means BNB Smart Chain Evolution proposal. This token standard extends ERC-20, which is the most common Ethereum token standard.


You can think of this token standard as essentially a blueprint for tokens that defines how they can be spent, who can spend them, and other similar rules surrounding their overall usage. Its creation had the main goal in mind of providing a flexible format for developers to launch a range of different tokens, and these can represent just about anything from shares within a business to even dollars that are stored within a bank account.


The main goal of PancakeSwap is to enable a fully decentralized exchange (DEX) where the orders, as well as the trades, can be automatically executed by leveraging the power of smart contracts.

Another interesting aspect surrounding PancakeSwap is the fact that there is no registration required in order to use the DEX or verification either. This means that all users have to connect to a supported cryptocurrency wallet, on top of which they have cryptocurrencies, and utilize it to its maximum potential, which enables a high level of anonymity.


Furthermore, PancakeSwap stands out because it has lower fees as well as quicker transactions when compared to exchanges that are based on competing blockchains, such as Ethereum for example.


With all of this in mind, PancakeSwap stands out due to the fact that it allows for community governance, the ability for users to instantly swap cryptocurrencies without making an account, and registering, with far lower fees when compared to some competitors. Furthermore, PancakeSwap is fully decentralized, and each user has access to 100% ownership of their own cryptocurrencies.


Alongside all of that, PancakeSwap features NFT collectibles, where users can win collectible non-fungible tokens (NFTs) just for participating in trading competitions and more fun and games.

\n How is PancakeSwap (CAKE) Used?


When we look at how PancakeSwap is essentially used, users on top of the platform can trade by drawing liquidity from one or more liquidity pools.


These rebalance after a trade gets completed on top of the platform. Furthermore, adding liquidity on top of PancakeSwap is a procedure where users essentially add liquidity to pools, where participants need to have assets in a supported wallet.


Trades that happen here subtract liquidity from one side of the pool and essentially provide liquidity to another whilst also changing the pool in terms of the relative values it has.


The liquidity pool is filled by users that end up locking their tokens through utilizing smart contracts, and transactions occur between the trader and the liquidity pool as a direct result of this.


What happens on top of PancakeSwap is whenever someone makes a trade on top of the exchange, they need to pay a commission, and here, a percentage goes to the liquidity providers, whilst another portion goes to the project’s overall budget as well as the CAKE buyback and burn proposals.


This facilitates the token exchange on top of the DEX whilst also allowing users to earn rewards.

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Use-Cases of PancakeSwap (CAKE)

PancakeSwap utilizes its own native cryptocurrency, known as the CAKE token, which plays a major role within the DEX.


Specifically, the CAKE token can be utilized in a variety of different ways throughout the PancakeSwap ecosystem as a whole, and these include:

Here, we can essentially see that there is a high level of utility associated with CAKE.


Whenever a user has the main goal of carrying out a transaction, they are not required to transfer their tokens to an account or to an exchange, and all they have to do is just use a supported cryptocurrency wallet.


Additionally, the platform provides multiple ways through which its users can earn money, and this comes in the form of yield farming, staking, as well as the lottery.


However, users of the DEX can also buy tokens in early-stage projects before they launch publicly.


This brings a much higher level of excitement for many investors who might want to get in on a new project as early as possible in order to get high returns later on.

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Usability & Primary Features of PancakeSwap (CAKE)

Whenever someone trades on PancakeSwap, the trader pays a 0.25% fee, where 0.17% is added to the Liquidity Pool of the swap pair they traded on.


There's also 0.03% which gets sent back to the PancakeSwap treasury, and there is a 0.05% fee that gets sent to facilitate CAKE buyback and burn.


This is how liquidity providers make money on top of the PancakeSwap DEX, as liquidity providers (LPs) receive a reward after each trade that occurs on top of it.


Furthermore, through leveraging the opportunities on offer by the DEX, users can earn higher yields when compared to competing platforms.


The LP Reward APR is earned through the process of providing liquidity. The farm base rewards APR earned by staking LP Tokens on the farm.


The farm base APR gets calculated in accordance with the farm multiplier as well as the total amount of liquidity within the farm, which is the number of CAKE tokens distributed. Farmers can also get LP rewards for providing liquidity.

Protocol

PancakeSwap runs as a decentralized exchange (DEX) on top of the BNB Smart Chain. It works on the automated market maker (AMM) model rather than the traditional market model where there is a seller and a buyer. Instead, in the AMM model, traders can trade digital assets by leveraging the power of permissionless liquidity pools.

Ledger

PancakeSwap is built on top of the BNB Smart Chain, which means that it relies on its underlying network and ledger for the functionality it has.

Smart-Contract Support

Each of the farms that are used by PancakeSwap has its own smart contract.


PancakeSwap is audited by numerous blockchain security firms, including CertiK and Slowmist.


While depositing funds into smart contracts always has some level of risk involved in terms of bugs, even for projects that are audited, the fact that multiple firms audited this DEX gives it a higher security rating.


The main smart contracts can be found on BscScan, and they include:

Each of the farms used by PancakeSwap has its own smart contract as well.

Tokenomics & Supply Distribution

When we go over the official CAKE tokenomics, we can see it is split across emission rate, distribution, and other deflationary mechanics.


We can see that the emission rate per block is as follows:

| Metric | Emission/block (CAKE) | Emission/day (CAKE) | |----|----|----| | Emission | 40 | 1,152,000 | | Burned Weekly | ~28.85 | ~830,800 | | Effective Emission | ~11.16* | ~321,200* |

When we look at the distribution, it is allocated as follows:

| Distributed To | Reward/block (% of emission) | Reward/block (total CAKE) | Reward/day | |----|----|----|----| | Farms | ~5.03% | ~2.0138 | 58,000 (approx) | | Lottery | ~0.35% | ~0.1389 | 4,000 (approx) | | CAKE Syrup Pool | ~22.5% | ~9 | 259,200 (approx) | | Total Daily CAKE Emission | ** \n ** | ** \n ** | 321,200 (approx) |

CAKE is also burned as follows:

  • 0.0575% of every trade made on PancakeSwap V2.
  • 100% of CAKE sent to the dev address.
  • 100% of CAKE performance fees from any IFOs.
  • 100% of CAKE spent on profile creation and NFT minting.
  • 100% of CAKE which has been bid during Farm Auctions.
  • 20% of CAKE gets spent on lottery tickets.
  • 20% of all profits gained from Perpetual Trading.
  • 45,000 CAKE on a daily basis, which has been historically assigned to the lottery.
  • 3% of every BNB Prediction market round is used to buy CAKE for burning.
  • 3% of every CAKE Prediction market round.
  • 2% of every yield harvest from all the flexible staking positions within the CAKE pool.
  • 2% of every NFT sale on the NFT Market is used to buy CAKE for burning.

Team & History

PancakeSwap (CAKE) is backed by Binance. However, the development team behind the project has largely remained anonymous.

PancakeSwap was created by an anonymous developer or team of developers in September 2020.

What made it different at the time of launch was the fact that it was built on top of the BNB Smart Chain, which offered much cheaper transactions when compared to Ethereum.

The native cryptocurrency of PancakeSwap, CAKE, saw a launch price of $1.37 when it initially launched and decreased to $0.25 shortly afterward. The all-time high of the CAKE cryptocurrency was on April 30, 2021, when it reached a value of $43.96.

Activities & Community

When we go over the community, we can see the following:


On the Official PancakeSwap Twitter page, there are over 1.6 million followers.


On the Official English-Speaking PancakeSwap Telegram Group, there are over 75,790 members.


On the Official Reddit Page, there are over 85,600 members.


On the Official PancakeSwap Instagram page, there are over 42,300 followers.


On the Official PancakeSwap Discord, there are over 19,700 members.

Development Activity and GitHub Repositories

When we go over the Official PancakeSwap GitHub page, we can see that there are 31 repositories.


Out of them, five are pinned, including:

On-Chain Activity

When we go over data from BscScan, we can see that PancakeSwap (CAKE) is trading at a value of $4.08,


The total supply is 908,962,499.751051 CAKE tokens.


Furthermore, when we look at the holders of the cryptocurrency, there are 1,252,541 addresses, as well as 175,363,122 transfers.


Source: BscScan


When we look at data from Bitquery, we can see that:

  • The transfer count is at 172879159.
  • There are 3399272 unique senders.
  • There are 4028515 unique receivers.
  • There is a total amount of 37867929527.0974 CAKE.
  • The median transfer amount is 3 CAKE.



Source: Bitquery

Activities and Partners

The PancakeSwap Mini-Program launched in Partnership with Binance - Binance users are able to try and experience decentralized finance, which features the Binance DeFi wallet and enables users to create a wallet, after which they can transfer funds, and even use PancakeSwap, all through using the Binance mobile application.


Oddz Partnered with PancakeSwap to introduce a Syrup Pool -  Users could utilize the AMM to exchange tokens, provide liquidity through farming and earn fees in return.


Binance Labs invested in PancakeSwap - Binance Labs is the venture capital arm of Binance, the world's largest crypto exchange by trading volume.

References & Reports

References

Market Research

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