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PancakeSwap (CAKE) Review: Better Version of Uniswap?
Decentralized Finance is one of the biggest draws in the cryptocurrency sector, with high returns, easy loans, and the ability to control your assets and how they work for you, it is easy to see why. However, with the current Ethereum transaction fees, these rewards are mitigated by having to pay an arm and a leg to redeem them, and at slow speeds.
That is where PancakeSwap (CAKE) comes in, built on the Binance Smart Chain and essentially a copy of Uniswap, the CAKE platform offers decentralized finance services with much lower transaction costs and faster transaction speeds. But PancakeSwap has grown to be much more than a copy of UNI, offering a host of services that have caused it to have more contract daily contract interaction than Uniswap does.
Our PancakeSwap review will help you decide if you should be flipping cakes and making stacks.
Where You Can Buy PancakeSwap
- Easy sign-up process
- Lowest transaction fees of any major exchange
- 175+ different digital assets available
- Free deposits
- International exchange with hundreds of different cryptos
- Extremely simple sign-up process
- Very high level of security
- Users can invest in the success of KuCoin through KuCoin Shares
- One-stop shop for crypto with built-in exchange, app, lending platform, debit card and more
- Native CRO token gives users a huge variety of perks and can be staked for over 10% APY
- Potential for earning high amount of interest when storing digital assets on Crypto.com
- A long-term goal of building cryptocurrency adoption on whole
PancakeSwap Pros & Cons
Pros
High APR/APY returns
Low transaction costs compared to Uniswap
Swap, Yield Farming, Staking, Lottery, IFO and Prediction products
More daily transactions than Uniswap
Active developers and community
Cons
Impermanent loss in liquidity pools
Prediction can result in losing funds quickly (gambling)
Network can get congested because of popularity
Potential for scams
PancakeSwap Ratings
Supply
- Max Supply: None
Network Speed
- Rating: Medium-High
- Reason: Uses Binance Smart Chain which has network block speed of 3 seconds, but as with Ethereum, the speed depends on congestion, so when the network is fairly free of traffic transactions process very quickly, but if it is congested you will need to increase your gas price if you want the transaction to process faster.
Disbursement
- Rating: Medium-High
- Reason: Apart from the main staking pools on PancakeSwap, which is composed of over 130 million of the 160 million circulating CAKE tokens, or over 80%, not one address holds even 1% of the supply and almost all the numbers close to 1% are exchange wallets. It is possible someone has a stake in the pool that is over 1% of the supply but that is not easy to parse from the block explorer.
Developer Engagement
- Rating: Medium-High
- Reason: The development team is always adding new features, pools, creating Medium articles, and engaging with the community on twitter where they have over half a million followers already. Voting proposals on changes to emission rates, new products, mechanics, etc., occur frequently and if for some reason the network seems slow, they tweet a list of nodes for users to try for faster speeds.
Liquidity
- Rating: Medium
- Reason: While it is currently a top 30 crypto asset by market cap, it is only available on a few centralized exchanges apart from PancakeSwap itself, and almost all the volume is on Binance. That being said it still has a minimum daily volume of about half a billion dollars, so it is not hard to sell on the centralized exchanges where it is listed, it is simply a matter of having an account already, and it is extremely liquid on the PancakeSwap platform itself.
History of PancakeSwap
PancakeSwap launched in September 2020 on the Binance Smart Chain as an alternative automated market maker (AMM) to Uniswap (UNI), with lower transaction costs and higher speeds.
While it started out as pretty much a copy and paste of Uniswap on another blockchain, PancakeSwap has developed a host of features which have caused it to be used more frequently than Uniswap. Features include the Lottery, Prediction, and Initial Farm Offerings, all of which will be discussed in the advantages section found below.
PancakeSwap now has more Total Value Locked than Uniswap, and has more daily transactions and contract interactions too.
Advantages of PancakeSwap
PancakeSwap has developed a nice suite of products on their platform that are advantageous to users. First, you have Syrup Pools (staking), where you can stake CAKE and earn CAKE or other available assets at an APR well over 50%. They just introduced an automatically compounding CAKE pool, so users do not have to manually harvest rewards and increase your stake.
Next there are the farms, where users can provide liquidity in the form of an asset pair such as CAKE and Binance Coin (BNB) in order to receive CAKE rewards. These farms can yield ridiculous returns but carry more risk if you are providing liquidity to a highly volatile asset.
The lottery is currently being reworked by the developed due to the increased price of CAKE, but when finished, users will be able to buy a lottery ticket for a $1 CAKE equivalent and can win a big jackpot of CAKE.
Prediction is a new product that lets users guess whether the price of BNB will be higher or lower than a locked in price in 5 minutes time. You can only use BNB to gamble, and all losing bets are pooled and added to the funds to the weekly CAKE burn fund.
Finally, the exchange itself has low transaction costs and requires no KYC, meaning you can begin trading as long as you have funds in a supported wallet.
Disadvantages of PancakeSwap
The disadvantages of PancakeSwap are essentially the same as with any other AMM, but really your only real risks are impermanent loss in yield farming, and gambling losses in the lottery or prediction games. Now, if you do not gamble with lottery or prediction, there is not a lot of risk.
Scams are the only other real disadvantage, as with Ethereum anyone can create a token on the Binance Smart Chain and potentially scam uninformed users, but because the Binance Smart Chain is cheaper to use, a lot of scams have migrated onto the Binance Smart Chain and extremely high risk assets can be traded on PancakeSwap. As with all scams, as long as you do research and think rationally, they are easily avoided.
PancakeSwap Frequently Asked Questions
You need to visit pancakeswap.finance to get on PancakeSwap, in order to access any of the services you will need to connect a Binance Smart Chain compatible wallet.
Yes, it is possible to make money on PancakeSwap due to their high yields, however it is also possible to lose money. Do your own research before investing in any cryptocurrency.
In order to swap on PancakeSwap you simply navigate to the “Trade” tab and then click “Exchange”. You then unlock your wallet, select which assets you would like to swap, and then confirm the swap.
