{"id":37417,"date":"2021-08-06T09:00:00","date_gmt":"2021-08-06T06:00:00","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=37417"},"modified":"2025-08-29T16:46:48","modified_gmt":"2025-08-29T13:46:48","slug":"what-is-pancakeswap-a-uniswap-style-dex-on-binance-smart-chain","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/what-is-pancakeswap-a-uniswap-style-dex-on-binance-smart-chain\/","title":{"rendered":"What is PancakeSwap? A Uniswap-style DEX on Binance Smart Chain"},"content":{"rendered":"
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What is PancakeSwap?<\/strong><\/h2>\n

It is a non-custodial platform on Binance Smart Chain (BSC) for swaps and yield farming with BEP-20 tokens. The venue has its own token, CAKE, and is akin to Uniswap and SushiSwap. Unlike those Ethereum-based exchanges, PancakeSwap offers faster transactions and lower fees, because BSC is a far more centralised analogue of Ethereum.<\/p>\n

To facilitate trading, the platform uses an automated market maker<\/a> (AMM) model. This means PancakeSwap has no traditional order book. Instead, trading occurs within liquidity pools funded by users. In return they receive liquidity provider (LP) tokens<\/a>, which entitle them to trading-fee income, farming and more.<\/p>\n<\/div>\n

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Who created PancakeSwap, and when<\/strong>? <\/h2>\n

The platform was launched on September 20, 2020 by anonymous developers with support from Binance. In February 2021 PancakeSwap became one of the largest DeFi exchanges by trading volume, and in March it surpassed Uniswap in total value locked (TVL) \u2014 $4bn versus $3.73bn.<\/p>\n

At the time of writing, PancakeSwap ranks among the top three decentralised exchanges:<\/p>\n

\"What
Top five decentralised crypto exchanges. CoinMarketCap data<\/a>.<\/figcaption><\/figure>\n

By TVL, PancakeSwap is first within the BSC ecosystem and fifth among all DeFi platforms.<\/p>\n

\"What
Largest DeFi by TVL on Ethereum (left) and BSC (right) according to DeFi Pulse<\/a> and Defistation<\/a>.<\/figcaption><\/figure>\n<\/div>\n
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How to start using PancakeSwap<\/strong>? <\/h2>\n

To begin, connect a Web3 wallet. Go to the official site<\/a> and click the Connect icon. A window will open to choose a wallet. Available options are MetaMask, TrustWallet, MathWallet, TokenPocket, WalletConnect, Binance Chain Wallet, SafePal Wallet and Coin98 Wallet.<\/p>\n

\"What
Wallet connection screen.<\/figcaption><\/figure>\n

After choosing a wallet, for example MetaMask, another window will open to confirm authorisation.<\/p>\n<\/div>\n

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What can you do on PancakeSwap<\/strong>? <\/h2>\n

Exchange<\/strong>. You need BNB to buy and trade tokens. You can purchase BNB directly on PancakeSwap or on Binance and then transfer it to your wallet. Trading is under Trade in the Exchange tab.\u00a0<\/p>\n

In version two of PancakeSwap there are more than 1,000 trading pairs. When swapping tokens, traders pay a 0.25% fee per trade<\/a>, of which 0.03% goes to the treasury, 0.05% is burned, and 0.17% is distributed to liquidity providers.<\/p>\n

\"What
Trading interface screen.<\/figcaption><\/figure>\n

Liquidity<\/strong>. In the same Trade section you can become a liquidity provider and receive LP tokens. Click Trade, then Liquidity and Add Liquidity. A window will appear to choose two assets to add to the relevant liquidity pool. Before doing so, it is worth learning what impermanent loss is<\/a> to understand the risks.<\/p>\n

\"What
Liquidity section interface.<\/figcaption><\/figure>\n

Farms<\/strong>. You can stake LP tokens in farms to earn yield. Go to Farms and pick the farm matching your LP token in Liquidity. For example, for CAKE-BNB LP choose the CAKE-BNB farm. Farming then begins, paying rewards in CAKE. You can harvest at any time by clicking Harvest.<\/p>\n

\"What
List of farms showing yields and liquidity.<\/figcaption><\/figure>\n

Pools. <\/strong>Here you can stake CAKE in \u201cSyrup\u201d pools and earn via staking. Rewards are paid in the pool\u2019s currency: if you enter Earn SPS, you will receive SPS. You can claim at any time by paying the transaction fee.<\/p>\n

\"What
List of liquidity pools with yields and TVL.<\/figcaption><\/figure>\n

Prediction<\/strong>. This is a new, beta feature. It lets you earn by predicting the BNB\/USDT rate \u2014 essentially a five-minute binary option. These are very risky because short-term price moves are notoriously hard to forecast. Before betting, carefully read the rules and guide<\/a>.<\/p>\n

\"What
Betting window for the BNB\/USDT prediction market.<\/figcaption><\/figure>\n

Lottery<\/strong>. The platform also runs a lottery every six hours. To take part, go to Lottery and buy a ticket for $5. You will receive a combination of six random numbers from 1 to 14, for example, \u201c5-7-7-10-5-13\u201d. To win, users must match:<\/p>\n