Develop a Decentralized Exchange like PancakeSwap

Published by : Pankaj | May-20-2022

Decentralized exchange PancakeSwap

  • The arrival of cryptocurrency development services has completely revolutionized the digital world. Also, the blaze of decentralized finance(Defi) has opened trending financial iterations that spin around speed, autonomy, and inclusion. These are the things that were lacking in the traditional finance realm.  The decentralized exchange (DEX) development is a space where users increasingly engage with autonomous markets. The PancakeSwap and the BNB Chain (formerly Binance Smart Chain) variants of decentralized exchanges like UniSwap (UNI) and SushiSwap (SUSHI) are prime examples of decentralized exchange development.

    What is PancakeSwap?

    The decentralized exchange that is most popular and constructed on the Binance Smart Chain blockchain network is PancakeSwap. In the last few months, it has become an aspect of the blockchain because of its liquidity, wide-ranging feature set, and sizable user base.

    The platform design allows users to trade securely, Binance coins (BNB) and used to exchange BEP-20 tokens. Also, it shares some similarities with Uniswap, in which user can swap their Coin for other Coins without third-party involvement. The decentralized exchanges offer automatic execution of all the trade on PancakeSwap via Smart contracts that cut counterparty risks.

    Moreover, the PancakeSwap is a fast and inexpensive alternative to Ethereum and is audited by many prominent blockchains security firms such as Certik and Slowmist.  Since PancakeSwap are open-source and its websites and Smart contract codes are open to the public review committee.

    Also, read: Exploring BEP-20 Token Standard on Binance Smart Chain

    The Functions of PancakeSwap

    For those who are not familiar with the functioning of DEX, then the working of decentralized exchanges like PancakeSwap is entirely different. It is one of the core functionalities of the Automated Market Maker(AMM). Also, it shows there is no need for an order book or single intermediary companies to facilitate trading. The deposit of funds is on the exchange platforms, and users become liquidity providers to the platform. Also, on the AMM like PancakeSwap, the conducted trade subtracts liquidity from one side of the pool and adds liquidity to the others. Thus, there is a weight change of assets in that pool and their relative values.

    Moreover, the decentralized exchange specification of the crypto tokens to the users is after the fund investment in the platform. With the digital wallet, the integration of the platforms is for users. It is after completing a specific process of crypto tokens. These digital wallets permit users to store their cryptocurrency securely and enable them to exchange it later.

    The PancakeSwap access is generally through a supported Web3 wallet, such as Metamask, TrustWallet, or WalletConnect and they all are decentralized applications (dApps). Also, by the PancakeSwap treasury, the funding of the platform takes place, which is 15% of all the generated trading fees.

    What makes PancakeSwap Exchange Special from Others?

    As we know, the development of a common decentralized exchange is on the Ethereum blockchain. But PancakeSwap development is on a Binance Smart Chain that leverages many of its unique properties. It is to provide an excellent end-user trading experience. For the crypto audience, the high usage rate of the Ethereum-like exchange resulted in high network congestion and high transaction costs, which are not good. The PancakeSwap offers benefits like low transaction fees and rapid confirmation times and makes the execution of trades faster.

    Moreover, PancakeSwaps offers an extensive range of secondary features to the CAKE holders, and some of these features provide more utility. Let’s take a look at some of the most prominent features, including:

    Yield Farming

    PancakeSwap offers users to earn an extra yield by staking supported liquidity(LP) tokens. And it is one of its many yield farms. On their LP tokens, users get CAKE yield by taking part in a yield farm.

    The selection of the right APY can differ from farm to farm, and it can be high as several hundred percent. Also, the PancakeSwap farming APY is high across several pairs currently. Thus, a farm like DUSK-BNB earns well over 200% APY and users will need to factor potential impermanent losses into their yield.

    Initial Farm Offerings (IFOs)

    Like an initial dex offering (IDO), PancakeSwap permits users to buy the token on a new-early stage project. And, it spearheaded a new initial coin offering (ICO) model called initial farm offerings (IFOs) before its public launch. But, during Initial Farm Offering (IFOs), users exchange their CAKE-BNB liquidity providers (LP) tokens for new projects. For the token deflationary mechanics, half-burning of the total funds is in this process.

    Ditto, Soteria, and Hot Cross are some of the projects that were launched using these methods.

    Lottery v2

    Among decentralized exchanges, in a sense, PancakeSwap is unusual and offers lottery features. That allows users to buy a lottery ticket to potentially lower down a large CAKE pot.

    At present, the price of a single ticket is around $5 in CAKE, but by purchasing 100 tickets at once, users can receive discounts up to 4.95%. Also, the prize pool allocated to the user is 40% of the total, which matches all six numbers on their lottery ticket. It is with equal prize sharing among winners.

    NFT Collectibles

    In 2021 NFT profiles are the new feature added to PancakeSwap, which permits users to choose an NFT profile picture. It is after purchasing one of the available Bunny NFTs.

    Read more: Developing a Decentralized Crypto Exchange like Uniswap

    Also, read: Yield Farming | Fuelling the Decentralized Finance (Defi) Space

    Primary Benefits of Developing a Decentralized Exchange like PancakeSwap

    In comparison to other exchange platforms, the decentralized exchange developed on the Binance Smart Chain platform and has the upper hand due to the following:

    • Cost-effective gas fee
    • Cross-chain compatibility
    • Proof of Stake
    • High-speed transaction processing
    • Flexible smart contract functionality
    • Generation of high yield
    • Sophisticated trading and swapping among many cryptocurrencies

    Conclusion

    A decentralized exchange like PancakeSwap has amplified the growth of cryptocurrencies. It has attracted a large market compared to others, and it is safer, and the speed of transactions is better.

    We Oodles blockchain organization, the best crypto development company in the market, provide end-to-end services. If you are willing to know more about PancakeSwap, connect with our blockchain expert teams.

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