Home Crypto Exchanges Providing for the Liquidity Pool using BNB and CAKE at Pancakeswap

Providing for the Liquidity Pool using BNB and CAKE at Pancakeswap

pancakeswap liquidity

Pancakeswap is a decentralized exchange, which is based on the Binance Smart Chain. Those who are familiar with Uniswap or Sushiswap will have no problem understanding and getting into Pancake Swap, which is very similar in Design.

The main difference is instead of using the Ethereum network, you are going to be connecting to the Binance Smart Chain and trading BEP20 tokens as opposed to using Ethereum ERC2 token.

Many people are choosing Binance Smart Chain because of the congestion in the Ethereum Network and the gas fees. By taking to Binance Smart Chain people are trying to save money on fees particularly when interacting with Decentralized Apps or DeFi.

People work on the apps, which work on the Binance Smart Chain because the fee is considered to be lower and it is also fast. Pancakeswap makes use of automated market maker or AMM model. Also, there are no order books and instead there are liquidity pools.

Pancakeswap is not just an exchange. You can also earn by being the liquidity provider and adding your tokens to the liquidity pools.  You can form your LP tokens and stake your CAKE to earn rewards, you can also try your luck in Lotteries and NFTs.

Pancakeswap have their own CAKE token with a circulating supply of 117 million CAKE tokens. To get started you have to start with Pancakeswap.Finance and you need to connect to a compatible wallet and further connect it to the Binance Smart Chain.

You can connect you to Metamask, Trustwallet, MathWallet, TokenPocket, WalletConnect, and Binance Chain Wallet.  Once you set up your wallet, you need some BNB to pay the transaction fee.  They have also got the BNB and the CAKE token.

First you have to withdraw your BNB by doing the due authentication.  You will be able to view your transaction on the BSC scan, which is very similar to the likes of EtherScan.  And you can use to check your transactions on the Binance smart chain.  The sooner you have some tokens to start trading you can exchange them for CAKE tokens and it will show the estimated amount that you are going to receive. It will show you the minimum you will get as there are slippage, fees to pay and some price movements due to the size of the liquidity pool underneath.

The price impact, which is the difference between the market price and the estimated price will be shown.  The price that you will be paying will also be shows.  Users can edit the slippage tolerance and transaction deadline.

If this is the first time that you are interacting with swaps you may need to approve the interaction with the wallet. Also, you will need to pay a small fee to do so. Then you can swap and you will see the confirmation of your order. After confirming the swap you will have the BNB and CAKE and you can provide to the liquidity to a pool.

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Steven Anderson

Steven is an explorer by heart – both in the physical and the digital realm. A traveler, Steven continues to visit new places throughout the year in the physical world, while in the digital realm has been instrumental in a number of Kickstarter projects. Technology attracts Steven and through his business acumen has gained financial profits as well as fame in his business niche. Send a tip to: 0x200294f120Cd883DE8f565a5D0C9a1EE4FB1b4E9

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