Pancakeswap Review for Canada 2023
Making Crypto Simple
When traders talk about crypto exchanges, one of the most important things they care about is the platform’s liquidity. Next comes the platform’s security, as it’s always better to be safe than sorry – especially when money is involved.
Speaking of liquidity, centralized exchanges (CEXs) secure their financial stability and cash flow by complying with the requirements of some of the top-tier financial institutions that back them as market makers (MM). These MMs provide more trading volume and secured liquidity to the CEXs.
On the other hand, decentralized exchanges (DEXs) that are not overseen by a regulatory body or conduct trades without a third-party escrow often have trouble keeping their platforms liquid.
Because of this, recent improvements in decentralized finance (DeFi) have led to a rapid rise in the use of Automated Market Makers (AMMs) to create DEXs. PancakeSwap is one of the DEXs that utilize AMM to manage the liquidity issue most DEXs struggle with.
This review will find out if PancakeSwap is a legitimate and trustworthy exchange, what services it offers to its customers and more importantly – how does it deal with the liquidity issue most DEXs have? Stick with us.
About the PancakeSwap Exchange
PancakeSwap is a relatively recent addition to the list of decentralized exchanges (DEXs) with a gourmet food storyline.
The platform is backed by an automated market maker (AMM) that runs on Binance Smart Chain (BSC). Designed as an alternative AMM to Uniswap, PancakeSwap shares many characteristics with this platform powered by one of the leading DeFi trading protocols, the Uniswap Protocol.
The exchange’s innovative product offers for earning passive income, such as yield farms and pools, trading competitions, lottery, staking, high APYs, NFTs, gaming, and more, have drawn many crypto traders since the platform’s launch in September 2020.
Another advantage PancakeSwap has over other DEXs is its incredibly cheap transaction costs, which generally cost a few cents per transaction, and the high transaction speed.
How to Use PancakeSwap?
All you need for trading on PancakeSwap is to connect your wallet to it. This innovative platform requires no registration and no verification procedures, making it ideal for traders who value their privacy.
PancakeSwap also has a highly user-friendly interface translated into about 30 different languages, which adds to the inclusive sense of ease when using the platform.
You can effortlessly trade, earn, or win cryptos through PancakeSwap
The CAKE Token
In the PancakeSwap ecosystem, CAKE serves as the PancakeSwap native token. The easiest way to get your hands on this cryptocurrency is through the CAKE Earn feature, from the platform’s crypto farms, syrup pools or lottery, or to purchase it on the exchange.
Holders of this sapid-sounding token can stake it in Syrup Pools to earn free tokens, earn additional CAKE through the yield farms, buy lottery tickets in the PancakeSwap lottery with CAKE, use the tokens to register a profile on the PancakeSwap’s NFT market and mint NFTs, vote on suggestions relevant to the future growth of the PancakeSwap ecosystem, and more.
Where to Buy PancakeSwap Tokens?
DEXs like Uniswap, Simpleswap, and PancakeSwap provide the CAKE token to traders who’d like to have it in their portfolio. The CAKE token is also available on several more prominent CEXs, like Binance, KuCoin, and Gate.io.
On the PancakeSwap Exchange, you can purchase a wide variety of crypto assets and tokens, such as Binance Coin (BNB), Binance USD (BUSD), Ethereum (ETH), Bitcoin (BTC), Tether (USDT), Chainlink (LINK), USD Coin (USDC), and many other BEP-20 tokens.
Since PancakeSwap does not support deposits of fiat currencies, you will need to use a fiat-gateway exchange and swap USD, CAD or EUR for crypto.
Trading Fees and Limits
PancakeSwap’s fees are incredibly low-cost compared to those of other decentralized exchanges. They charge a flat rate of 0.25% for all transactions, and their tokenomics strategy is expected to boost the worth of CAKE. Here’s how their fee gets divided:
- As a fee compensation for the liquidity providers, 0.17% is contributed back to the liquidity pools.
- A contribution of 0.03% goes to the PancakeSwap Treasury.
- 0.05% of the total transaction fee is utilized to repurchase and burn CAKE tokens.
As you can see from this calculation, the liquidity providers receive virtually all of the collected fees. A tiny portion is put into the national treasury, while the remaining funds are put for the weekly purchase and burning of CAKE. The goal here is to keep inflation under control.
There’s also a network fee paid to the miners of the respective blockchain when you move some coins from the platform.
PancakeSwap is a heaven for those who prefer earning interest on their coins rather than creating countless strategies and market analyses. Here are some of the most popular features of this exchange.
Syrup Polls Staking
PancakeSwap Exchange’s equivalent of staking is branded a Syrup Pool, and it allows users to stake CAKE for up to 52 weeks to collect additional CAKE tokens. The possibility of losing the investments in these Syrup Pools is completely eliminated.
There is also an auto-compounding pool available for CAKE, which frees users from the need to collect interest and stake their tokens at irregular intervals.
Farms are the equivalent of staking in a liquidity pool on any other exchange. You can acquire liquidity pair tokens by contributing two digital assets with a liquidity pool.
After you have deposited those assets into the pool, you will start to receive dividends in CAKE, but you also risk experiencing impermanent loss of your funds.
Calculations of the Yield Farm APR take into account the LP rewards APR obtained by providing liquidity and the Farm Base rewards APR received through staking LP Tokens in the Farm.
Is PancakeSwap Safe to Use?
Unlike CEXs like Binance or Coinbase, PancakeSwap enables you to retain full ownership of the cryptocurrency you trade. The platform has no ownership over your assets because there is no trading account on this platform other than your wallet that you use for trading.
Your sensitive data is safe with PancakeSwap since the exchange never asks for any personal information that it might share with other parties.
Last but not least, this platform has never been hacked and is subjected to external cybersecurity audits regularly, resulting in a high-security grade.
PancakeSwap, unlike other exchanges, does not offer customer service. If you have problems with some of the exchange’s functionalities, you can reach out to the exchange’s Telegram group for assistance.
Pros and Cons
To sum up, here are the benefits and disadvantages of using the PancakeSwap exchange.
- A beginner-friendly platform;
- Low transaction costs;
- High blockchain transaction speed;
- No registration needed;
- No KYC user verification procedures;
- Many passive income options;
- Regular audits by cybersecurity company CertiK;
- A non-fungible tokens market;
- High APY returns for the crypto pools and farms;
- Traders have 100% ownership over their funds.
- There’s a risk of an impermanent loss when using the liquidity pools and farms.
- No customer support.
The Bottom Line
What began as a clone of the Uniswap exchange quickly eclipsed the original crypto initiative and rose to become one of the world’s major DEXs. PancakeSwap’s most significant advantage is that it provides a safe platform with fast processing speed, which draws traders with low costs and entertaining crypto products.
What’s the bottom line? What we assumed was a shady enterprise hidden behind a catchy moniker turned out to be a delectable treat for crypto investors, particularly those who prefer generating passive income and love having real fun with cryptos. After all, earning CAKE sounds pretty inviting, doesn’t it?
Frequently Asked Questions
When you supply liquidity to a liquidity pool and the price of your deposited asset decreases on the market relative to when you deposited them, you incur an impermanent loss.
The impermanent loss issue can impact all digital currencies. The phrase “loss of value” refers to the situation that arises whenever a digital asset is sold or exchanged on the crypto market. This loss might be temporary or irreversible, depending on the prevailing market circumstances when the deal was concluded.
Connecting your wallet to the PancakeSwap Exchange is a breeze. Simply do the following:
- Go to www.pancakeswap.finance website;
- Look for the “Connect Wallet” icon in the upper right corner and click on it;
- Choose the wallet that best suits your trading criteria;
- Confirm via your digital wallet that you wish to link it to PancakeSwap and you’re all set.