PancakeSwap (CAKE): Decentralized Exchange on Binance Smart Chain
PancakeSwap (CAKE) officially landed on HotsCoin on November 6th. HotsCoin has observed that it is a decentralized exchange (DEX) built on the BNB Chain, utilizing an automated market maker (AMM) system. The project is currently open for trading on HotsCoin.
Key Information:
PancakeSwap (CAKE), as a fork of SushiSwap, shares almost identical code but has an advantage of being built on the Binance Smart Chain (BSC), offering cheaper and faster transactions. Furthermore, PancakeSwap provides additional features such as yield farming across other protocols, lotteries, and initial farm offerings (IFO).
Notable Events in PancakeSwap, As Recognized by HotsCoin:
- June 6, 2022: PancakeSwap completed a strategic fundraising round, with the fundraising amount undisclosed.
- September 20, 2020: PancakeSwap went live on the mainnet.
An Introduction to PancakeSwap:
PancakeSwap is one of the most popular automated market maker (AMM) protocols on the Binance Smart Chain and widely adopted in the DeFi industry. As a decentralized exchange (DEX), PancakeSwap is built on the Binance Smart Chain, enabling investors to exchange BEP-20 tokens. Despite its relatively short time in operation, PancakeSwap has attracted a large user base due to its low transaction fees, robust liquidity provisions, and diverse functionality. According to CoinGecko, PancakeSwap currently ranks among the top decentralized exchanges, with a 24-hour trading volume exceeding $100 million and over 5,477,351 website visits.
Advantages of PancakeSwap as Noted by HotsCoin:
Since its launch in September 2020, PancakeSwap has gained popularity for several user-favored features:
- Low Transaction Fees: PancakeSwap's transaction fees are significantly lower than the gas fees on Ethereum because it operates on the Binance Smart Chain and uses the BNB token for settlements.
- Diverse Investment Applications: In addition to basic trading functions, PancakeSwap offers various other applications, including farming, lotteries, price predictions, NFT sales, and initial farm offerings (IFO).
- A Variety of Tokens: The platform allows the purchase of various tokens based on the BEP-20 standard, providing users with a wider selection.
CAKE Token Supply, Noted by HotsCoin:
CAKE tokens do not have a set supply limit. Each block generates 25 CAKE tokens, resulting in a daily CAKE total supply of 1,152,000 tokens. HotsCoin has also observed that CAKE tokens follow an infinite inflation model, with 40 CAKE tokens rewarded per block. This means 1,152,000 new CAKE tokens are created daily.
Earning CAKE and Other Tokens:
- Earning Tokens via Syrup Pools:
Staking CAKE tokens can help you earn additional tokens. CAKE holders have a weekly opportunity to receive millions of dollars' worth of free token rewards from core projects. New projects are added every day, allowing users to accumulate more rewards and enjoy long-term benefits.
- Earning CAKE via Farms:
By providing liquidity, you can convert your assets into LP tokens and use them to yield more CAKE tokens. While this method may expose you to more market volatility, it offers higher annual returns to mitigate the effects of market fluctuations. This approach encourages proactive involvement in liquidity provision and offers greater returns.
- Earning from Transaction Fees:
Even without holding tokens in farms, you can still earn from transaction fee revenue when you contribute tokens to liquidity pools (LPs).
PancakeSwap's Token Distribution:
PancakeSwap's token distribution includes various allocations:
- 100% distributed to the team address.
- 100% from fees charged in the IFO overfunding.
- 100% used for personal profile creation and avatar NFT minting.
- 100% used for bidding in farm auctions.
- 20% allocated for lottery purchases.
- 20% from perpetual contract fees.
- 8% distributed weekly to the rainbow lottery pool.
- 3% of each BNB round used to buy back and burn CAKE in the "Predict" pool.
- 3% of each CAKE round used to burn CAKE in the "Predict" pool.
- 2% as performance fees for the potential CakeFlex staking pool.
- 2% used to buy back and burn CAKE from NFT marketplace transactions.
PancakeSwap's team conducts weekly token burns. Typically, if the weekly burn amount exceeds 3.6 million (a net integer), CAKE experiences deflation. According to PancakeSwap's team, the past four weeks have seen burns exceeding 5 million CAKE tokens, clearly surpassing the 3.6 million net burn threshold. This indicates that CAKE has recently entered a deflationary phase, which is favorable for price development. Consequently, for investors with the time and interest, this could be a promising investment opportunity, especially during price troughs when potential returns can be substantial.
Conclusion:
Pancake
Swap (CAKE), as a decentralized exchange built on the Binance Smart Chain, has attracted numerous investors due to its low costs, multifunctionality, and the CAKE token's incentive structure. However, it's essential to acknowledge the high-risk nature of the cryptocurrency market. Therefore, thorough research and careful risk assessment are necessary before investing. Investors should make prudent decisions while considering their risk tolerance. HotsCoin will continue to monitor the project ecosystem, and the above report is for reference purposes only and does not constitute investment advice (Report Date: November 2023).
No comments yet