How To Use PancakeSwap: A Step-by-Step Guide

what is pancakeswap

Build your identity as a certified blockchain expert with 101 Blockchains’ Blockchain Certifications designed to provide enhanced career prospects. Once completed, your staked LP balance will show how much you have on the farm. You’ll be transferred to a page where all available farms are listed. PancakeSwap was created as a fork of SushiSwap in September 2020, using an almost identical code but instead being built on the BNB chain.

Connect to a wallet

After connecting the wallet to PancakeSwap, you are ready to start exploring the new DeFi protocol and its interesting functionalities. You have to click on the “Unlock Wallet” option for unlocking the features. Then, you can witness the different options for choosing a wallet like WalletConnect, MetaMask, Binance Chain Wallet, Trust Wallet, and many other choices. You might be wondering about the compatibility of MetaMask with PancakeSwap exchange despite being an Ethereum wallet.

  1. You will need to confirm the transaction within your wallet to execute it.
  2. In line with the Trust Project guidelines, the educational content on this website is offered in good faith and for general information purposes only.
  3. You have to click on the “Unlock Wallet” option for unlocking the features.
  4. The prize pool for each session depends on the number of participants.
  5. Granted, as with other DEXs, crypto newbies will likely struggle to navigate PancakeSwap and understand its myriad features.

Farming and Staking Opportunities with PancakeSwap

According to the AMM or Automated Market Maker system, the participants have to contribute to the liquidity pools with their assets. Users have to deposit their funds in the liquidity pools and receive liquidity provider tokens or LP tokens in return. Then, liquidity providers can use the LP tokens to reclaim their share in the liquidity pool alongside a share of trading fees in the pool. Therefore, you can just trade BEP-20 tokens alongside adding liquidity and earning rewards with the help of the PancakeSwap app. Trades are safely and automatically done using the protocol’s liquidity pools, which are created through smart contracts. Instead of dealing with an order list and looking for someone to swap your tokens with, PancakeSwap users lock their tokens in a liquidity pool using smart contracts.

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what is pancakeswap

There are several cryptocurrencies on these syrup pools, with an automatic investment function to boost. Like other DEXs, such as SushiSwap, you earn rewards through yield farming on PancakeSwap. After receiving the LP token from your liquidity pool, you can use them for yield farming. The discussions about PancakeSwap token farming and staking showcase the promises with the new DeFi protocol.

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In this PancakeSwap tutorial, you’ll learn how to use PancakeSwap with a wallet like Trust Wallet to swap BNB for another token. Georgia Weston is one of the most prolific thinkers in the blockchain space. In the past years, she came up with many clever ideas that brought scalability, anonymity and more features to the open blockchains.

Voting is fairly user-friendly on PancakeSwap, and it’s completely free, whereas other protocols often charge users a gas fee to cast their votes. After you successfully deposit liquidity on the protocol, you will receive LP tokens to represent your share of the liquidity pool. As discussed already, farming opportunities on PancakeSwap are one of the foremost positive factors in their favor.

Another important highlight in the working of PancakeSwap refers to the development of liquidity pools. How will the decentralized exchange enable the creation of liquidity pools? Where will users get the tokens for putting in these liquidity pools? Therefore, the PancakeSwap exchange also features an exclusive range of opportunities for DeFi farming. For example, the liquidity grab has been in favor of the exchange, with more than $1 billion of total value of assets migrated to PancakeSwap since its launch.

PancakeSwap works with wallets such as Trust Wallet, MathWallet, Binance Chain Wallet, and even MetaMask. Yes, MetaMask is an Ethereum wallet, but it can be configured to work with Binance Smart Chain. Unlike centralized exchanges, how to reconcile accounts payable accountingtools you won’t have to input a bunch of personal data—you don’t even have to create a profile. Granted, as with other DEXs, crypto newbies will likely struggle to navigate PancakeSwap and understand its myriad features.

The improved speed and lower costs of Binance Smart Chain have made it a popular choice for many new projects. But what’s important to note here is that PancakeSwap has some technical designs that make it a more efficient investing experience for users. Get BNB BEP-20 and send it to your wallet (need BNB BEP-20 for all tx fees). Note that you will need to enable the pool if this is the first time staking your CAKE to that pool. Congrats on successfully learning how to use PancakeSwap for your first trade.

PancakeSwap also has many other interesting functionalities which every beginner should know about in detail. IFOs or Initial Farm Offerings is an interesting method for leveraging yield farming to bring a newly launched token closer to users. Choose the token pair which you want to deposit in the liquidity pool.

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