PancakeSwap V1 is a decentralized platform that works on the basis of the AMM (automatic money-making) algorithm. Launched in September 2020, this DeFi exchange is often chosen by investors for cryptocurrency farming.
Some people consider that it is a clone of Uniswap thanks to the almost similar functionality of the facility. However, there are some principal differences between these resources. The project PancakeSwap was built on the BSC or BinanceSmartChain, which is the service founded by the famous cryptocurrency exchange Binance in the autumn of 2020. The founders decided that it should be a better option thanks to a higher speed of transactions and lower fees compared to alternatives. The decision proved to be right. BSC popularity has grown ever since thanks to its affordable transaction fees, which is a very topical issue taken into account that the situation is rather lamentable with the Ethereum network at the time of writing.
Users can get rewards for farming and providing liquidity. They can also participate in staking to earn more. In this way, the platform is not only a decentralized exchange for swapping tokens but a means of earning passive income.
When the platform started working, the team set the goal to overtake such DeFi rival platforms as SushiSwap and Uniswap. The goal was ultimately reached. The volume of funds locked in PancakeSwap can be compared with the amount locked in Uniswap.
PancakeSwap V1 technologies
Different activities contribute to the popularity of the service. For instance, the company works over NFT products, swaps, lending products, and convenient UI customization with regard to users’ needs. Also, the team has enabled a 3-digit API for its customers. All these things attract numerous cryptocurrency users and investors, but the facility doesn’t plan to stop. The plans include other attractive features such as NFT-based gamification, margin trading, and binary options.
PancakeSwap V1 products
CAKE is a native token of the PancakeSwap DeFi. This is a token of the BEP-20 standard, which is similar to ERC-20 on Ethereum. CAKE performs the government function. The token holders can vote for different proposals that determine the future of the project. The members of the community can also make their proposals on a special voting portal. Most often users make proposals to add new tokens for the creation of new liquidity pools and exchange pairs or to settle new pools to start the farming activity.
It's possible to get rewards from farming, staking, lotteries, and contributions to liquidity pools. Some of these instruments are connected. Those who want to start the farming activity with LP tokens, should get them first. Liquidity providers get LP tokens instead of the assets they provide to the liquidity pool and get the reward depending on the amount invested in the pool. If users want to make a contribution to the pool they can buy the required tokens in the same pool.
The lottery sessions are regularly conducted to make the DEX more alluring for customers. Customers buy tickets to participate in the event. The combination of numbers provided randomly to the participant includes 4 digits. With the matching of numbers, the user can win half of the lottery pool.
Though the assortment of products is big, the roadmap includes the development of more services on the platform including lending and borrowing, binary options, margin trading, and NFT-based gamification.
PancakeSwap V1 platform
PancakeSwap doesn’t employ order books delivering the service of automatic liquidity pools. They are used to buy or sell cryptocurrencies. For instance, a client must add CAKE and BNB to the pool in a 50/50 ratio to become a liquidity provider of the CAKE/BNB pool. In return, he or she receives LP-tokens CAKE-BNB, which confirm the deposit of funds and reflect the state of our share in the pool. These assets will be rewarded.
Received LP-tokens can be invested in CAKE farming and at the same time continue to receive rewards from trading commissions in the pool. LP tokens can be sold at any time and withdrawn from the pool.
Syrup pool is one more staking product of the company. Syrup Pool is an opportunity to stake and earn new CAKEs or farm other tokens, depending on the selected pool. The difference between the concepts of "farming" and "staking" is as follows. When staking, users get the same currency that they contributed to the stake pool, i.e. when they contribute CAKE they get CAKE as a reward. When farming, users add one currency to the pool and get another as a reward. For example, users contributing LP-tokens CAKE/BNB, receive CAKE as a reward.
These concepts are often used interchangeably, however, PancakeSwap provides both staking and farming via Syrup Pool and Farms correspondingly. With Farms, users stake LP-tokens received for providing liquidity to the pool, and the reward is paid in CAKE.
All rewards are credited in real-time, tokens can be withdrawn from the pools at any time. Information about the assets contributed to farming and staking, about the accrued rewards in real-time can be viewed on PancakeSwap in the tabs "Farms" and "Pools" respectively.
PancakeSwap V1 fees
The exchange charges a commission of 0.2% of the transaction, for each transaction in the pool, of which 0.17% goes to liquidity providers, and 0.03% goes to PancakeSwap Treasury (the treasury of the exchange, where they are burnt later). The rewards are distributed among contributors in proportion to their share in the pool.
PancakeSwap V1 security
The company applied to the reputable security company Certik to conduct the code audition of the DEX. The procedure was successfully performed by its experts in October 2020.
PancakeSwap V1 team
There is an anonymous team behind the facility. However, the fact that CZ Zhao, the founder, and CEO of Binance invested in the company, inspires some trust in users.