As Ethereum’s transaction fees become more expensive, investors are looking for cheaper alternatives. To conduct a transaction on decentralized exchanges (DEXs) built on top of the Ethereum network, you must spend more than $ 100 on transaction (gas) fees. These gas charges vary with grid usage and can sometimes be hundreds of dollars.
Fortunately, other blockchains have cheaper transaction structures, such as Binance Smart Chain. Although compromises have to be made in terms of decentralization and security, Binance Smart Chain allows users to conduct transactions on their blockchain for less than a dollar. The leading exchange based on Binance Smart Chain is PancakeSwap, and retail investors are using it as an alternative, cheaper DEX than Uniswap on Ethereum.
These cheap fees are largely due to Binance Smart Chain’s proof-of-stake consensus model. Now learn how to buy PancakeSwap (CAKE).
What is PancakeSwap?
PancakeSwap is a leader in the decentralized finance (DeFi) industry. DeFi replaces the need for financial intermediaries like lenders, exchanges, insurance companies, and even mutual funds. These intermediaries can be replaced with smart contracts: code that is uploaded to the blockchain to conduct financial transactions.
While the majority of the DeFi industry is based on the Ethereum network, more and more developers are opting for alternative blockchains such as BSC due to the significantly lower transaction and development costs.
PancakeSwap is the leading DEX on Binance Smart Chain. The platform allows investors to trade cryptocurrencies through smart contracts so you don’t have to trust a third party to hold your funds. Plus, trading on a DEX is anonymous as you only need to connect your cryptocurrency wallet to trade crypto – you don’t need to open an account with DEXs.
Since PancakeSwap is decentralized, it cannot provide investors with its own liquidity to buy and sell crypto. Instead, investors can use their cryptocurrencies in smart contracts to generate passive income from the exchange’s transaction fees.
Brief history of PancakeSwap
The founders of PancakeSwap are anonymous, which may worry some investors. However, the DEX’s code has been checked and is likely to be safe to use. PancakeSwap’s native token, CAKE, started trading when the DEX launched in September 2020. At the time, the token was trading below $ 1. As of December 2021, CAKE will trade for around USD 12 per token.
PancakeSwap is a branch or copy of Uniswap. Uniswap is the leading DEX on the Ethereum network, and the platform exchanges more volume on its network than on the Bitcoin network. However, PancakeSwap has some advantages over Uniswap. In fact, the fees for Binance Smart Chain are less than 1% of the fees of Uniswap, which allows it to be used with low capital amounts.
PancakeSwap also offers CAKE tokens to liquidity providers to motivate investors to use their crypto for interest. These rewards can be sold at market price or you can use them to enter PancakeSwap lotteries.
Step 1: Open an online account.
To buy CAKE tokens, you need to open an account with Binance. Binance is the largest cryptocurrency exchange in the world, but some features are limited when you are in the US In order to comply with the US Securities and Exchange Commission’s (SEC) Know Your Consumer (KYC) regulations, you must provide your identity in order to comply with the Start trading.
If your computer’s IP address is outside of the United States, you can access Binance’s fully functional website. The best way to fund your account is with cryptocurrency. The best exchanges that you can easily connect to your bank with are Coinbase, Gemini, and Kraken.
Step 2: Buy or Download a Wallet.
No matter what cryptocurrency you invest in, you shouldn’t be keeping your money on an exchange. Cryptocurrency exchanges are big targets for hackers, and several platforms have been hacked in the past. Since centralized exchanges hold investors’ funds, those funds can be stolen in the event of a security breach.
Hardware wallets are the safest way to store cryptocurrencies. These wallets store crypto offline on physical devices, which makes online access impossible. If you’re looking for a free alternative to keeping your crypto safe, consider using a software wallet.
Best for
Crypto enthusiasts
Best hardware wallet: SafePal S1
Since the BEP-20 tokens from Binance Smart Chain have not even been on the market a year, there are not many hardware wallets for cryptocurrencies that support BSC tokens. The best hardware wallet that supports CAKE tokens is the SafePal S1.
The SafePal S1 is a multi-currency wallet and can support over 10,000 different cryptocurrencies. Most likely, the SafePal S1 is the only hardware wallet you will ever need.
SafePal also has a mobile app that allows you to manage your portfolio from your phone.
Best software wallet: Trust Wallet
Trust Wallet is a multi-currency wallet that supports Binance Smart Chain tokens. The wallet is free to download on iOS and Android, making it an extremely accessible option for new or seasoned crypto investors.
Trust Wallet can also connect to PancakeSwap so you can trade crypto right from your wallet.
Step 3: make your purchase.
After you’ve chosen where you’d like to store your crypto assets and created an account with Binance, you’re ready to make your purchase. Binance offers a few pairs you can trade CAKE tokens with, including CAKE-USDT, CAKE-BTC, and CAKE-BUSD.
BUSD and USDT are stablecoins that are linked to the price of the dollar so that the purchase of CAKE tokens is simulated with the US dollar. Alternatively, you can trade the CAKE / Bitcoin pair. Some crypto investors like to trade against Bitcoin as the returns on Bitcoin are considered the “standard” return in the cryptocurrency markets.
Bonus area
When large decentralized exchanges like Uniswap and SushiSwap can’t solve their scalability problems, more users can choose PancakeSwap instead. Transactions over Ethereum’s blockchain can cost over $ 100, which makes it impossible for many investors.
Trade, sell or convert your CAKE tokens
If you use Trust Wallet to store your CAKE tokens, you can trade your cryptos right from your wallet. Simply connect your Trust Wallet to PancakeSwap.finance and you can start trading.
When you want to cash out your investment, simply send your crypto from your trust wallet to a crypto exchange linked to your bank account.
Current crypto prices
If you look at the macro trend, the cryptocurrency industry is in a bull market. Recently, however, many crypto prices have fallen by over 25%, which is a buying opportunity for long-term investors. Despite this slump, many major cryptocurrencies such as Ethereum, Uniswap and BNB tokens have risen by over 100% since the beginning of the year.
Is PancakeSwap a Good Investment?
Historically, PancakeSwap has been a great investment. The token rose over 1,000% in less than a year and offers early investors a tremendous return on investment.
If Ethereum’s blockchain can’t be scaled anytime soon, it is likely that PancakeSwap will continue to experience increasing adoption. However, if Ethereum solves its scaling problems, users can choose to use Ethereum’s robust network through the Binance Smart Chain.
Benzinga has developed a specific methodology to rank cryptocurrency exchanges and tools. We prioritized platforms based on offers, prices and promotions, customer service, mobile app, user experience and benefits, and security. To see a full breakdown of our methodology, please visit our cryptocurrency methodology page.
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