PancakeSwap is a DEX based on the BNB chain. Photo: Ira Lichi/Shutterstock
pancake swap (CAKES) is a leading decentralized exchange (DEX) rising in popularity in 2021 hitting an all-time high of $44.18 on April 30, 2021.
However, due to the bearish circumstances created by the collapse of Terra-UST, CAKE fell to a 52-week low of $2.51 on June 18. On December 15, CAKE was trading at $3.69, almost 92% below its high.
CAKE live price chart
CoinMarketCap statistics further indicated that PanCakeSwap was the 7th largest DEX in terms of trading volume and market share. It competes with other established DEXs like dYdX (DYDX), Uniswap (UNI) and others.
What is PancakeSwap and given such fragile macroeconomic conditions and a highly competitive market, does it have a future? let’s find out
What is PanCakeSwap and how does it work?
PancakeSwap is a DEX based on the BNB chain (formerly Binance Smart Chain) and not Ethereum (ETH). It allows users to exchange BEP-20 standard tokens effortlessly. BEP20 is a token standard used to create tokens on BNB, similar to ERC20 used to create tokens on Ethereum.
DEXs use smart contracts to allow users to trade directly with each other instead of depending on a centralized platform. Your assets are kept in non-custodial wallets, which increases security.
Historically, most DEXs used order books — databases that track all open buy and sell orders made on an exchange. While many DEXs continue to use order books, automated market maker (AMM) DEXs are growing in popularity due to their ease of use and greater liquidity.
How does PanCakeSwap work? To facilitate crypto transactions, AMM-based PanCakeSwap relies on user-operated liquidity pools. Rather than looking through an order book and trying to find someone willing to trade a user’s tokens, AMMs allow users to lock their tokens in a liquidity pool. This allows users to make the exchanges they want while rewarding those who keep their funds in the pool.
PanCakeSwap’s native utility and governance token is CAKE. What is the PancakeSwap coin used for? The main objective of the token is to incentivize the supply of liquidity to the PancakeSwap platform.
Users can be incentivized by depositing and locking Liquidity Provider (LP) tokens. The LP token rewards obtained can be farmed on the PancakeSwap platform, which allows users to collect CAKE.
PancakeSwap also offers game-like activities such as B. Betting on whether the price of the BNB coin will go up or down within a specific time frame.
It also has a lottery component where users can buy a ticket to win a large amount of CAKE. The DEX also sells a variety of bunny-themed collectable non-fungible tokens (NFTs). And there are Initial Farm Offering (IFO) sales that allow users to buy fresh new coins from upcoming projects.
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PancakeSwap coin price history
PancakeSwap cryptocurrency was launched in September 2020. According to CoinMarketCap, it has achieved a return on investment (ROI) of 245.75%.
Based on PancakeSwap coin price history as of 2020, CAKE coin price fell from $1.37 on September 29 to $0.41 on October 2, a 70% loss within days of its launch. It closed the year at $0.60.
At the start of 2021, CAKE’s price action turned extremely bullish amid favorable market conditions and overall cryptocurrency acceptance. As a result, PancakeSwap cryptocurrency surged from $0.62 to an all-time high of $44.18 on April 30, an increase of 7,025%.
However, market sentiment turned bearish in May 2021 when Elon Musk tweeted about stopping Bitcoin payments for Tesla cars and the Chinese government tightened its crackdown on cryptocurrencies.
As a result, the CAKE coin price fell to $12.72 on May 24 and bottomed at $12.03 on July 20. Market sentiment then turned slightly optimistic. CAKE token price hit $26.13 on Aug 28. However, the rally did not last. The price dropped to $10.93 on December 14th. It closed the year at $12.03.
Since the start of 2022, the crypto market climate has been bearish amid the failure of top crypto projects, rising inflation, the Russia-Ukraine war and fears of a recession. As a result, CAKE token price dropped to a 52-week low of $2.51 on June 18th.
As of December 15, CAKE was trading at $3.70 and had a market cap of $584 million, making it the 64th largest crypto by market size.
PanCakeSwap (CAKE) news and price drivers
PanCakeSwap has passed several crucial milestones that could impact the price in the coming days. Here is a quick summary of the most important parts:
Start of the Aptos PanCake Bridge
PanCakeSwap announced the Aptos-PanCake Bridge in December 2022 to easily connect CAKE tokens to Aptos, a Layer One blockchain created by Aptos Labs.
Because of this bridge, CAKE has become a multichain token between BNB Chain and Aptos. Aptos PancakeBridge allows users to bridge their CAKE across these two blockchains in a 1:1 ratio, allowing them to explore a broad and exciting new ecosystem.
PanCakeSwap burn event
PanCakeSwap revealed the results of the CAKE burn round in December 2022. According to the official tweet, 6.95 million tokens worth around £26 million were burned.
The destroyed CAKE tokens account for 4.4% of the 158.28 million tokens in circulation, according to CoinMarketCap statistics. Furthermore, the total supply of CAKE (350 million) is more than half of the token’s maximum supply (750 million), indicating widespread token burning.
The purpose of token burning is to reduce the overall supply of cryptocurrency and thereby induce demand. When demand is high and supply is limited, the price goes up.
The final result
While PancakeSwap’s early stages were not well received by users, CAKE has taken time to build that trust and demonstrate the strength of its AMM-based DEX foundation.
Meanwhile, unstable market conditions have eroded investor confidence in crypto assets, as evidenced by the CAKE token’s price movement and trading volume statistics.
Transaction volume, number of users and price fluctuations in the cryptocurrency market will help determine the future price of PancakeSwap (CAKE).
While knowing the key metrics about CAKE is important for accessing the health of the project, it should not be a substitute for your own research.
You should always do your own due diligence before trading by looking at the latest news, technical analysis and fundamental analysis and also consider the opinions of a variety of analysts before making a trading decision.
Remember that past performance is no guarantee of future returns. And never trade or invest money you cannot afford to lose.
frequently asked Questions
How many PancakeSwap coins are there?
As of December 15, CAKE Coin has a current circulating balance of 158.27 million tokens and a maximum supply of 750 million tokens.
Is PancakeSwap safe?
PancakeSwap is an open source application that has undergone many security assessments from Certik, Peckshield and SlowMist. In addition, it uses multi-signatures for all smart contracts, which increases security.
What Makes Pancake Swap Unique?
PanCakeSwap uses an automated market maker (AMM) to facilitate the exchange of tokens without an order book. It also offers a variety of passive income generation activities such as: B. Yield farming and lottery tickets.
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