By Zaara Hary
What is PancakeSwap?PancakeSwap is one of the famous DeFi based Protocol which aims to provide Automated Market Making (AMM) by being a #1 liquidity provider. This open-source DeFi based exchange is built on the Binance Smart Chain (BSC) through which the platform users can swap BEP-20 tokens.CAKE is the native token of PancakeSwap and the users can swap, add liquidity, farm, yield, stake, and win CAKE Tokens through lottery.PancakeSwap Exchange SpecificationType – DeFi Based ExchangeNative Token – CAKE TokenBlockchain Network – Binance Smart Chain (BSC)Token supported for Swapping – BEP-20Exchange Model – Automated Market Maker (AMM)How Does PancakeSwap Work?Automated Market MakerAn Automated Market Maker is a decentralized exchange protocol that doesn’t need an order book but relies on the mathematical formula to set the price for the assets.
The price of the assets is fixed according to the pricing algorithms. This pricing formula can vary according to the DEX protocols.As PancakeSwap works on the AMM model, which means the users can trade their digital assets on the platform at any time even if their order book isn’t matched with anyone else.Instead, the trading occurs against liquidity pools.These liquidity pools are filled with user’s funds.
The users deposit those funds into the pools just to receive a liquidity provider token or LP Token in return. These LP tokens can be used to reclaim shares and trading fees.So, in short, anyone can trade BEP-20 tokens or add liquidity to PancakeSwap and earn LP tokens as rewards.These LP tokens are in several ways.
For Example: if you add BUSD and BNB to the pool, you will receive BUSD-BNB LP tokens as rewards in return and For BETH and ETH deposits, you will get BETH-ETH LP tokens in return.Business Benefits of launching DeFi Protocol like PancakeSwapListed here are the benefits of creating a DeFi based exchange like PancakeSwap.Less Initial InvestmentGenerate High ROIHuge Liquidity at LaunchEliminates middlemanGo with DeFi trendsFast Brand Identification and visibility100% Guaranteed Trading VolumeNo manpower required and more.Want to launch your own DeFi based DEX Exchange like Pancakeswap? Get Pancakeswap Clone Script from Bitdeal now !