Learn About PancakeSwap - A Decentralized Finance Platform That Allows You To Trade, Earn & Explore NFTs

Greetings guys, I'd like to welcome you to my blog. Today, I'll be reviewing one of the biggest and the most popular decentralized exchange Pancakeswap

Pancakeswap is a decentralized exchange built on the Binance Smart Chain blockchain that enables users to swap or exchange their BEP-20 tokens as well as carry out other DeFi-related tasks. This decentralized exchange not only enables quick transactions with low transaction fees, but also allows you to generate passive income with your tokens. I'll describe how this works and how you can do it.

_{Screenshot From PancakeSwap}

As was already mentioned, the platform uses the Binance Smart Chain Blockchain (BSC), which is well-known for its quick transaction times and low transaction costs. The high-capacity BSC block chain is thus a trustworthy and affordable alternative to the Ethereum chain. This blockchain enables quick and inexpensive transactions using bep-20 tokens and the BSC Eth bridge.

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Overview Of Pancakeswap

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The Automated Market Maker, or AMM, mechanism is used in transactions on the Pancakeswap platform. The conventional order book which is found in the centralized exchanges is not necessary in this case for trader engagement (buying and selling of digital tokens). Instead, trading (buying and selling) occurs directly with the liquidity pool. The platform's users, also known as liquidity providers, put their money (tokens) into the pools. These tokens are use to facilitate swapping or exchanging on the platform, and in return the liquidity providers get LP tokens which can be used for staking, earning from the transaction fees on the platform as farming the platform native tokens or other BEP-20 tokens.

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Pancakeswap Native Token

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CAKE is thе Pаnсаkеswар рlаtfоrm'ѕ native token, the token is currently ranked #77 according to CoinmarketCap, it's trading currently at $2.89 with a total market capitalization of $406,942,113 and a trading volume of $62,446,380 in the last 24 hours. CAKE hit $44.18 on April 2021, the token all time high, and it all time low was $0.0002318 on September 2020.

There are currently 140,815,698 CAKE circulating with a total supply of 307,093,614 CAKE.

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Getting Started With Pancakeswap

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The first step in starting to trade on Pancakeswap is to connect a cryptocurrency wallet from the platform's wallet options. Among the wallets that are available are cryptocurrency wallets like MetaMask, Binance Chain Wallet, TrustWallet, and others.

• How To Connect Crypto Wallet To PancakeSwap

The very first step is to visit the PancakeSwap website, on the homepage click on Connect, then select More to displayed all the available crypto wallets.

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I'll be making use of Trust wallet, so I select Trust wallet and I was redirected to my Trustwallet app, where I approved the connection.

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_{Trustwallet connected to PancakeSwap website}

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• Trading On PancakeSwap

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You can choose to buy or sell tokens on the Pancakeswap platform once your crypto wallet has been successfully connected to the site. Regardless of the Tokens you are trading with, you will need Binance Chain (BNB) as transaction fees because the platform is powered by BSC. As an alternative, you might use the BSC ETH bridge.

On the homepage, click on Trade as shown in the screenshot below.

You've deferent options of trading, you can choose to trade using the Swap method, this allows you to instantly swap your token to another token.

All you've to do is select the token you want to swap, and the token you want to swap to, and enter the amount and the number or amount of the token you want to swap to will be displayed.

For instance, I want to swap BUSD to CAKE, I entered 3.427 BUSD, and the amount of CAKE I'll be getting which is 1.789 CAKE was displayed as well. I finally click on Swap and confirm the swap.

_{Note: You must have enough BNB for transactions fee}

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Limit is another method of trading on PancakeSwap, here you've the option to set your preferred price target just like we usually do on centralized exchanges.

If you want your transaction to be executed immediately, then you need to place your order above the market rate if you're selling, and if you're buying you need to place below the market rate. The advantage of limit trade is that you can just set your order and go and do something else, and when the market hit your order it will be executed.

_{Note: You must have enough BNB for transactions fee}

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Perpetual is another interesting form of trading on PancakeSwap, if you're familiar with futures trading on centralized exchanges. PancakeSwap recently allows users to trade with borrowed funds, using leverage to increase their capitals. This will allow users to earn X depending on their leverage.. in addition to this, users can decided to short or long perpetuals just like futures trading.

_{Note: You must have enough BNB for transactions fee}

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• Liquidity On PancakeSwap

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The platform uses the AMM mechanism to execute transactions, doing away with the traditional order book system. This AMM mechanism needs liquidity to facilitate the transactions, and anyone can easily add their tokens to the pool and join as a provider. Every user of a platform has the option to become a liquidity provider, and in return, they can earn passive income. In addition, the liquidity tokens can be used for a variety of purposes, such as staking, farming, and so on.

To provide liquidity you need to have two different tokens, and it must be deposited in 50-50. For instance if you choose to provide liquidity on BNB-BUSD pool, then you need to deposit the two tokens which are BNB and BUSD and the two tokens must be equal. I've previously made a post on how to provide liquidity on PancakeSwap

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• Earning On PancakeSwap

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One of the benefits of this platform is that users can utilize the Earn option to make passive income.

On the homepage click on Earn, here we have two sub-options Farms and Pools

Farm allows users to make use of their liquidity tokens to farm the platform native token (CAKE) or mostly newly launched tokens.

Remember you'll need to first provide liquidity to the pool, then the liquidity tokens will then be used to farm and earn passive income. I've previously made a post on how to farm on PancakeSwap

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Pools known as Syrup Pool is another form of earning on PancakeSwap, users can easily stake their CAKE or any other available tokens and earn passive income depending on the token APY.

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PancakeSwap NFT Marketplace

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A decentralized NFT platform sounds interesting right? Well PancakeSwap offers NFT marketplace to it users, you can easily buy, mint or sell NFTs on the Binance smart chain using PancakeSwap.

Always have it at the back of your mind that you'll need BNB as fee to perform any transactions on Pancakeswap, even on the NFT marketplace

Buying NFTs

To buy NFTs, you click on Collections, this will displayed all the NFTs available, you can sort by volume, lowest and highest price as well as supply.

Select your preferred NFT you wished to buy, I select the Cartel Punks NFT, chose the item I want and the details of the NFT was displayed. Finally click on Buy

Selling NFTs

To sell NFTs on PancakeSwap, you need to first activate your profile this will cost 1.5 CAKE.

All you have to do is click on Manage/Sell then click on Activate Profile the rest of the process are self explanatory.

PancakeSwap has made a name for itself as one of the largest decentralized exchange platforms. Built on one of the most amazing blockchains (BSC), the platform enables users to engage in DeFi-related activities for a relatively low transaction fee while also giving them access to a number of additional earning features that will help them maximize their cryptocurrency holdings.

In Summary:-

I've talked about the BSC-based decentralized exchange platform PancakeSwap, shown how to connect your cryptocurrency wallet to it with relevant screenshots, and covered some of the platform's key features, such as the NFT market place, including how to buy and sell NFTs there.

Thank you!

_{References Source}

_{https://docs.pancakeswap.finance/}

_{https://coinmarketcap.com/currencies/pancakeswap/}

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