What Is Pancakeswap? How To Use The Binance Smart Chain?

What Is Pancakeswap_ How To Use The Binance Smart Chain

Cryptocurrency exchange Binance intends to conquer the world of blockchain. The company’s powerful smart chain technology has already been used to develop decentralized applications like ICON, and Loopring.

However, the benefits of smart chains do not end there. Smart chains allow complex behavior that is impossible with regular blockchains, making them especially relevant in the field of P2P trading.

PancakeSwap is a revolutionary P2P trading platform. It envisions establishing a decentralized and safe trading platform that is free from any third-party interference in which people can enjoy the features.

In contrast to well-known centralized crypto exchanges like Binance and Coinbase, which are run by a single corporation, decentralized exchanges, also known as DEXs, enable trading to take place without the involvement of a middleman.

Ethereum, the platform on which the majority of activities related to decentralized finance (DeFi) are carried out, serves as the foundation for many of these cryptocurrency exchanges.

However, competing smart contract blockchains are beginning to take root, and comparable DEXs are beginning to sprout up in other places, often with their distinctive twists.

In the instance of PancakeSwap, the platform is not built on Ethereum but rather on Binance Smart Chain; as a result, its trading fees are significantly more affordable. PancakeSwap has already made a significant splash among DEXs, although Binance Smart Chain is a more recent and less well-known cryptocurrency than Ethereum.

What follows is a rundown of all you need to know about the PancakeSwap feature available on the Binance Smart Chain, including a concise introduction to how to get started using it.

What Is Pancakeswap?

What Is Pancakeswap

PancakeSwap is a P2P trading platform that runs on the Binance Smart Chain. The platform gives users the ability to make trades directly with each other and does not rely on third-party services for settling transactions.

As a result, users enjoy much greater control over their funds than they would in more commonly-used cryptocurrency exchanges like Binance and Coinbase.

PancakeSwap is a distributed exchange that enables you to make considerable tokens without the involvement of a centralized intermediary while allowing you to retain custody of the tokens you trade at all times.

It is constructed using automated smart contracts that are deployed on the blockchain network known as Binance Smart Chain, which is managed by the cryptocurrency exchange Binance.

PancakeSwap is a decentralized cryptocurrency exchange that is not controlled or operated by Binance, which is surprising given that Binance runs a centralized exchange service.

The user experience of the service is extremely comparable to that of the widely used Ethereum DEX, Uniswap. Even though it is possible to move over tokens from other platforms using Binance Bridge and “wrap” them as a BEP-20 token for use on the DEX, PancakeSwap is only utilized for BEP-20 tokens that are running on the Binance Smart Chain.

Like many other DEXs, PancakeSwap has constructed an automated market maker (AMM) system, which depends on user-fueled liquidity pooling to facilitate crypto trades.

Users can avoid dealing with an order book and finding another person who wants to swap the tokens they have for the ones they want by locking their tokens into a liquidity pool using smart contracts.

This eliminates the need to find someone else who wants to swap the tokens they have for the ones they want. That enables you to make the trade you want, while people who keep their cash in the pool gain rewards all the while.

A growing number of decentralized financial intermediary (DeFi) services are emerging, and PancakeSwap is one of them. These services make it possible for cryptocurrency traders to engage in transactions involving trade tokens without the involvement of a third party who takes a sizeable cut of the funds.

Although there are DEXs on Ethereum (such as Uniswap) with substantially larger average trade volume, it is one of the major  DEXs on the Binance Smart Chain, making it one of the biggest such DEXs on the Binance Smart Chain.

How does PancakeSwap work?

The way PancakeSwap works is to enable users to get a better deal by maintaining custody of their tokens. Since there are no middlemen who take a cut of the funds under ordinary circumstances, users can enjoy token trading without taking a significant hit to their profits.

Their system uses an automated smart contract known as an obligatorily order-based market maker (OOMM).

Another feature of the OOMM system is that it gives users the chance to generate income from their idle assets. PancakeSwap’s smart contracts make it possible for traders to earn from their cash balances, which is more than what a traditional DEX can offer.

To summarize, PancakeSwap strengthens the decentralized nature of the cryptocurrency exchange by enabling users to make transactions without any intermediaries, as well as by giving them the ability to earn interest on their tokens while they wait.

PancakeSwap’s smart contracts are to a great extent the same as other DEXs’, and they use an automated OOMM which is analogous to a traditional market-making system. While it may sound like a lot of technical jargon, it is not. PancakeSwap’s OOMM facilitates direct trades between users without the involvement of any third-party service.

How does the Binance Smart Chain work?

How does the Binance Smart Chain work

Binance is a cryptocurrency exchange that enables traders to trade ETH and other popular crypto coins. Its owners, Binance Labs, and Binance Technologies are two separate entities that operate differently from each other.

The former is an arm of the latter founded as a decentralized venture capital fund for blockchain startups. That makes it compatible with various other decentralized assets beyond cryptocurrencies, intending to create a truly global blockchain ecosystem.

Why use a DEX?

Why use a DEX

Besides avoiding the involvement of third parties and their associated transaction fees, a major advantage of DEXs is that they provide users with full control over their tokens at all times. You do not have to worry about losing access to your tokens if the DEX network is hacked and your funds are stolen by a malicious entity or if the site goes out of business and disappears.

PancakeSwap vs. other DEXs

To be fully transparent, PancakeSwap is not a perfect DEX. It does not guarantee that users will always get the best trading price, nor does it prevent users from being swindled by other traders. It is merely an open resource that is designed to give traders a wider range of trading options without compromising their control over their funds.

The DEX is fully decentralized, which means that there are no central authorities that keep a huge amount of money as profit. Instead, PancakeSwap directly uses the liquidity accumulated by its users to facilitate trades.

The Binance Smart Chain makes it possible for smart contracts to fund their roles and thus provide liquidity for the DEX with virtually zero transaction fees.

PancakeSwap’s automated market maker (OOMM) works to facilitate trades as long as users are willing to contribute to the liquidity pool. If you hope to make money by trading on PancakeSwap, then you should contribute your token balances to the pool.

Also, keep in mind that the protocol in place is only designed for assets that originate from Binance. That makes it impractical for those who want to trade tokens from other platforms such as…well, literally any other platform.

How to Access Binance Smart Chain?

The Binance Smart Chain is, in a sense, an extension of the Binance cryptocurrency exchange, but the two can also be considered to be two different things.

The fact that they share the same name is most likely a result of branding strategies relating to Binance’s acquisition of Bitcoin and Ethereum blockchains. They are not related. To access it, you need to first acquire a valid blockchain address by requesting one from Binance via email or by using your existing account on the main platform.

Step 1 – Acquire a Binance account.

Step 2 – Acquire a base address to access Binance Smart Chain. If you have 1 token or more on Binance, then the process is straightforward. Just log in to your account on the main platform, go to the trading page and tap on ‘Asset’, then tap on ‘Binance smart contract’. In case you do not have a base address already, use your email address or Discord ID as such an address.

Step 3 – After acquiring a base address, you are all set to increase security through ‘Uphold’ and make sure your assets are safe.

The future of PancakeSwap:

The future of PancakeSwap

PancakeSwap is a decentralized exchange that does not come with any of the problems associated with centralized exchanges. The main reason behind its success is the fact that it provides users with the ability to retain custody of their tokens at all times.

This, in turn, enables them to avoid paying high fees to third-party service providers for trades. Among numerous other things, this helps it beat out rivals like Uniswap and EtherDelta, which are both run by third parties.

PancakeSwap is among several services that are not operated by Binance, but this is the case because Binance runs a centralized exchange service.

The fact that the exchange is accessible via smart contracts on Binance Smart Chain, which is managed by Binance and further connects to other DEXs like Uniswap, also makes it one of the largest decentralized exchanges in terms of trading volume as well as liquidity.

Binance is one of the few cryptocurrency exchanges that engage in partnerships with other companies, and they can partner with PancakeSwap in the future and leverage their order book.

Such a partnership could help increase the liquidity of PancakeSwap and further stimulate cryptocurrency trading on it. For now, PancakeSwap is preparing itself for expansion and is slated to become a major player in the decentralized exchange scene.


PancakeSwap is a platform where you can buy and trade tokens and Ethereum directly from the wallet with zero fees. The exchange provides fast trade execution, and transaction verification is done through the Ethereum blockchain.

The Binance smart chain makes it possible to call external contracts directly with no fees and zero delays. The platform is new but already looks promising, providing a decent alternative. It provides end-to-end anonymity, the ability to retain custody of your tokens, and no price risk if the exchange goes down.

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