Pancake Swap is the leading DEX (Decentralized Exchange) built on the BSC. As an AMM (Automated Market Maker), it does not use order books like traditional exchanges. Instead, it matches buy and sell orders directly. Similar to Uniswap, the well-known DEX on the Ethereum Network, Pancake Swap enables users to swap between crypto assets by tapping into user-generated liquidity pools. There are also some great yield farming opportunities on the platform.

Pancake Swap is essentially a Uniswap clone, but built on BSC to deliver a faster and cheaper trading experience using BEP-20 tokens. Since launching in September 2020, Pancake Swap has become extremely popular with DeFi users. At the time of writing, the platform has 3.1 million users which is the most of any decentralized application on any chain.  

Pancake Swap has its own native token called $CAKE which has the following utility;

• Acts as a governance token. Voting for new features, pools etc.
• Is a reward token for depositing into Liquidity Pools.
• Can be used in Syrup Pools. Stake to earn $CAKE or other tokens.
• Can be used to buy tickets to enter the platform’s in-house lottery.
• Can be used to enter IFOs (Initial Farm Offerings). 

Using Pancake Swap

Firstly, you’ll need visit the Pancake Swap website and connect your Metamask or other compatible wallet. 

1. Make sure that you have selected the BSC as the chosen network in your wallet and check that it is funded with some BNB to cover transaction fees. Always keep some BNB in your account for this purpose. 

2. Connect your wallet on the top right-hand corner.

How to do Token Swaps

Swapping tokens on Pancake Swap works much the same way as its popular competitor on the Ethereum network, Uniswap. So, if you have used Uniswap before, the transition to Pancake Swap is very easy.

1. Visit the Pancake Swap homepage and click on the ‘Trade’ tab and select ‘Swap’.

2. Select the tokens that you want to swap ‘From’ and ‘To’. The default token swap settings are $BNB and $CAKE but you can easily change these by clicking on the drop-down menu and selecting the tokens that you want. Note that if the token you are searching for does not automatically appear in the drop-down menu, you may need to manually add the contract address for the token. It’s important to ensure the token address that you paste into the form field is genuine. 

3. Once you have selected your trading pair, enter the quantity you want to trade and click the ‘Swap’ button. 

4. A pop-up box will appear asking you to confirm the transaction. Click the ‘Confirm Swap’ button.

5. Confirm the transaction with your Metamask. Note that the status will be shown as pending until approved. Once approved, you’re done!

NOTE 1:  Pancake Swap have recently introduced Limit Orders. This feature enables users to place a limit order to trade at a set price. Your order will be filled if the market price matches your desired price.

NOTE 2: There may be situations where users want to adjust the slippage tolerance for a particular trade. Slippage is the price difference that occurs between a token’s quoted price and the paid cost. Pancake Swap automatically sets the slippage tolerance to 0.5% and this is fine for most users, most of the time. But to change this, click on the settings icon (appears as a wheel cog) and manually enter your desired slippage %. 

How to Yield Farm on Pancake Swap

Yield farming on Pancake Swap is fairly straight forward and it’s a great way to earn some $CAKE as rewards. There are loads of farms to choose from. Visit the Farms page for a complete list.

After you choose the farm that you want to participate in, you’ll need to set yourself up by depositing the 2 assets (of equal value) in order to create your LP tokens. These LP tokens are required to deposit into the farm that you have chosen. In this example we’ll follow the steps required to enter the CAKE-BNB farm using Metamask.

1. On the Pancake Swap homepage, click the ‘Earn’ tab and select ‘Farms’

2. Click on the BNB/CAKE Farm option and select ‘Get CAKE-BNB LP’

3. Enter the amount of $BNB that you want to pair. Note that the system automatically calculates an equal dollar value of $CAKE that is required. If you don’t have enough (or any) of either token you will need to go to the swap section and purchase some tokens.

4. The system may ask you to ‘Enable’ either of the tokens. In this case, click on the ‘Enable CAKE’ button and confirm the transaction on your Metamask.

5. Click on the ‘Supply’ Button

6. Click the ‘Confirm Supply’ button. This pop-up will also show you an estimate of how many LP tokens you will receive. 

7. Confirm the transaction on your Metamask. Once approved, you have now created your LP tokens.

8. Go back to the Farms page and find the CAKE-BNB pair. Click the ‘Enable Farm’ button and confirm this transaction with your Metamask.

9. Click the ‘Stake LP’ button.

10.   Enter the quantity of LP tokens that you want to deposit. In this example we have selected the ‘Max’ option. Then click the ‘Confirm’ button and confirm the transaction with your Metamask.

11.   Once the transaction is approved you will be able to see the amount you     have deposited on the dashboard. As you earn rewards you can click on the   ‘Harvest’ button and claim your $CAKE.

If you want to remove your LP tokens and unpair them, take the following steps.

1. Click on the ‘minus’ button.

2. Enter the amount of LP tokens that you want to withdraw from the farm and click ‘Confirm’ and then confirm the transaction with your Metamask. In this case we have chosen to unstake the ‘Max’.

3. Now head on over to the Pancake Swap homepage and click the ‘Trade’ tab and select the ‘Liquidity’ option. Your Cake-BNB holdings will be displayed. Click the ‘Remove’ button. 

4. Choose the quantity of LP tokens and click the ‘Remove’ button. In this case we have chosen ‘Max’. 

5. A pop-up will appear indicating the estimated amount of each token that you will receive. Click the ‘Confirm’ button. Confirm the transaction with your Metamask. You’re done!

NOTE: Whenever engaging in yield farming, users should be mindful of the risks associated with Impermanent Loss (IL), a subject covered previously in the ‘Risks’ section of this guide. 

How to Stake on Pancake Swap

Syrup Pools has a large range of options to choose from which enable you to stake $CAKE, to earn $CAKE or other tokens. In this example we will deposit into the Auto-CAKE pool, which at the time of writing is offering a 60.55% APY. This pool automatically compounds rewards to maximise the amount of $CAKE that you earn. This example assumes that you already own some $CAKE tokens. If you don’t, head on over to the swaps page and buy some.

1. Visit the Pancake Swap homepage, click on the ‘Earn’ tab and select ‘Pools’. You’ll then be taken to the Syrup Pools page. Click on the ‘Auto-Cake’ Pool.

2. Connect your wallet.

3. Click the ‘Enable’ button and confirm the transaction with your Metamask.

4. Click the ‘Stake’ button and confirm the transaction with your Metamask.

5. A pop-up screen will appear. Enter the quantity of $CAKE that you would like to stake (in this case we have selected Max), click the ‘Confirm’ button and then approve the transaction with your Metamask.

6. You’ll now see that your $CAKE is staked on the dashboard and you’ll begin to earn staking rewards.

With this particular example, there is a 0.1% unstaking fee and your tokens are locked for a minimum of 72 hours. There is also a performance fee of 2%. Always be mindful of conditions like these whenever you enter a staking pool.