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What is PancakeSwap? Is it a Good Investment Now?

The Cake Token is one of several tokens used within the PancakeSwap protocol and made available for token swaps.

Similar to Uniswap, PancakeSwap is an automated market maker (AMM) and decentralized application (dApp) featuring a liquidity pool where users can earn fees from staking, lending, and yield farming.

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What is PancakeSwap & Cake Token?

Pancake Swap lives on Binance Smart Chain. Binance Smart Chain (BSC) entered the market on September 01, 2020. This fourth-generation blockchain was designed to run parallel to the Binance chain.

Impressively, the BSc is far more advanced than their previous series. For example, the platform is capable of making transactions faster and cheaper.

PancakeSwap-Price-Prediction
PancakeSwap-Price-Prediction

The network has ultra-high performance and is capable of generating a block every 3 seconds. One of the main goals behind BSC was to enable smart contracts and staking mechanisms for BNB.

To accomplish this task, the development team at Binance created the BEP-20 token standard. You can think of BEP-20 as Binance’s version of the hugely popular ERC-20 token standard.

However, since the BEP-20 tokens reside on the BSC, they are very rarely traded and may not provide users with some of the unique opportunities available on their Ethereum counterparts.

PancakeSwap Exchange

The protocol uses the Automated Market Maker (AMM) model to provide liquidity for traders. Unlike the traditional order books used by centralized exchanges (CEXs), the AMM relies on a specialized algorithm to price assets.

This algorithm adds liquidity from multiple digital assets in smart contracts. In a normal order book, you must have a buyer and a seller, which usually ends in a liquidity crunch.

With AMM, you can buy and sell in a liquidity pool. The key feature of PancakeSwap is to trade BEP-20 tokens instead of ERC-20 tokens. You can pool your funds to add liquidity to the pool.

In exchange for your funds, you receive Liquidity Provider (LP) tokens, called Cakes, which are PancakeSwap’s core and governing asset, which you can cultivate and stake to earn rewards.

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The trading fee on Pancake Swap is 0.2%. 0.17% goes to the liquidity providers and the remaining 0.03% goes to the Pancake Swap Treasury which has been burnt.

What is PancakeSwap Used For?

Pancake Swap works as a decentralized exchange (AMM) through the system of Binance Smart Chain. You can use it as an AMM or DeFi app with which users can freely exchange tokens, earn fees and provide liquidity.

Is Pancakeswap a Good investment?

If you had put all your investment into PancakeSwap in early 2021, it is clear that the total holding would have increased by about 1200%+.

You can also make some significant investments by increasing the volume on the decentralized exchange and Binance support, which plays an important role.

PancakeSwap Price Prediction: Will it rise in the Future?

The currency began a bull run in 2021 and rose to an astonishing $19.11 on 19 February 2021, reaching an all-time high.

Pancake Swap can compete against other decentralized currencies and collect value based on a trusted cryptocurrency bond.

It will focus on adding more trading features to attract buyers. By 2021, the higher price of $60 could be traded by CAKE. The mixed reception encouraged us to speculate that,

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If you’re looking forward to the promising and potentially early adoption of an extremely diverse Defi ecosystem, the cake of pancake swaps is an interesting opportunity to make investment planning.

Is Pancake Swap Legit & Safe?

With a huge market cap and usage, yes, it is safe to say that Pancake Swap is legit, has been running its business for the past year.

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