PancakeSwap (CAKE)
PancakeSwap, launched in September 2020, is a decentralized exchange and finance platform enabling users to trade cryptocurrencies, earn rewards through staking and farming, participate in lotteries, and engage in governance decisions. The platform was founded by a group of anonymous developers and initially differentiated itself by building on Binance Smart Chain (BSC), offering faster and cheaper transactions compared to Ethereum at the time. PancakeSwap now operates on nine different chains, including Ethereum, BNB Chain, and others, focusing on low fees and efficient transactions. It quickly became one of the largest decentralized exchanges by trading volume as of February 2021. PancakeSwap's primary selling point is its use of smart contracts to automate trades and orders.
Overview
PancakeSwap uses an automated market maker (AMM) model for swapping BEP-20 tokens on the Binance Smart Chain. It provides features such as liquidity pools, swapping, yield farming, and an NFT profile system. The platform has undergone regular audits by blockchain security firms like Slowmist and Certik. PancakeSwap's native token, $CAKE, is a BEP-20 standard token used as a utility cryptocurrency. On February 17, 2021, PancakeSwap became the first billion-dollar project on the Binance Smart Chain. Binance Labs, the venture capital arm of Binance, invested in PancakeSwap's utility and governance token, $CAKE, in June 2022.
| Ticker | CAKE |
| Category | Decentralized Exchange (DEX) |
| Website | https://pancakeswap.finance/affiliates-program |
| @pancakeswap | |
| Telegram | PancakeSwap |
| https://www.reddit.com/r/pancakeswap | |
| Contract Addresses | |
|---|---|
| binance-smart-chain | 0x0e...82 Copied! |
| arbitrum-one | 0x1b...2cCopied! |
| base | 0x30...a1Copied! |
| zksync | 0x3a...cdCopied! |
| polygon-zkevm | 0x0d...beCopied! |
| opbnb | 0x27...1cCopied! |
| ethereum | 0x15...98Copied! |
| aptos | 0x15...FTCopied! |
| linea | 0x0d...beCopied! |
PancakeSwap v4
On March 15, 2024, PancakeSwap introduced v4, a new iteration featuring a modular AMM architecture. This version enhances pool capabilities, supports diverse pricing curves, and prioritizes gas efficiency. PancakeSwap v4 includes multiple pool types such as CLAMM with Hooks and LBAMM with Hooks. Additionally, the platform launched a Developers Program with a $500K USD allocation to support and empower DeFi developers.
Technology
PancakeSwap employs the AMM model, allowing permissionless trading through liquidity pools and enabling liquidity providers to earn a share of transaction fees. Token swaps occur through these pools without intermediaries.
v3 Concentrated Liquidity Pool
The v3 Concentrated Liquidity Pool enhances the traditional AMM model by allowing liquidity providers to concentrate their funds in specific price ranges, resulting in higher relative liquidity levels and increased trading fees for the same amount of capital.
Products
Exchange
The PancakeSwap Exchange is central to the platform, offering features like swapping/trading without a centralized exchange, liquidity pools, yield farming, and initial farm offerings. Token swaps involve trading one token for another via automated liquidity pools and market makers on BNB Smart Chain and Ethereum.
Yield Farming
Yield Farms allow users to earn CAKE by staking LP Tokens.
Farm Auctions
Farm Auctions enable project teams to boost token liquidity, increase trading volume, and attract organic traffic.
Initial Farm Offering (IFO)
An IFO allows users to participate in limited-time offers to purchase new tokens.
Bridging
PancakeSwap's multichain expansion includes bridging CAKE between multiple chains with a 1:1 ratio and no fee in CAKE.
Simple Staking
In September 2023, PancakeSwap partnered with Binance Earn for Simple Staking, enabling single-sided staking of popular tokens like CAKE on the BNB Chain.
Liquid Staking Integration
PancakeSwap's partnership with Binance Earn facilitates the liquid staking integration for the WBETH token, allowing easy conversion and swapping of ETH to WBETH.
Gaming Platform
PancakeSwap Gaming Marketplace collaborates with third-party crypto game developers to offer engaging games to its community.
Lottery
The PancakeSwap Lottery provides an opportunity for users to win CAKE prizes.
Pottery
Pottery combines CAKE lock-staking with lottery elements for a chance at higher yields on CAKE deposits.
NFT Profile System
Users can personalize profiles with names, teams, and NFT profile images.
PancakeSwap Mini-Program
The PancakeSwap Mini-Program in the Binance app offers a seamless experience for users exploring DeFi and PancakeSwap.
Options
Options trading on PancakeSwap allows users to trade options, earn premiums, and collect swap fees through a partnership with Stryke.
CAKE Token
$CAKE is a BEP-20 token available across all nine chains supported by PancakeSwap. It serves as the governance token, allowing users to influence policy changes and earn incentives by staking tokens.
Utility
$CAKE governs the PancakeSwap ecosystem, is used in yield farming, lotteries, staking for rewards, IFO token sales, and creating Pancake Profiles and minting NFTs.
Tokenomics
$CAKE has a hard cap of 450 million. PancakeSwap incorporates deflationary mechanisms to ensure more CAKE leaves circulation than is produced. Regular token burns are conducted to manage supply.
veCAKE
veCAKE, or vote-escrowed CAKE, plays a crucial role in governance, enabling users to vote on proposals and influence CAKE emissions within liquidity pools. veCAKE is non-transferable and obtained by staking $CAKE.
Binance Bridge
PancakeSwap, with Binance's help, offers a bridge for non-BEP 20 tokens. Users can wrap ERC-20 tokens to BEP-20 assets via the Binance Bridge, facilitating token movement between Ethereum and Binance Smart Chain.