What is PancakeSwap's use?

PancakeSwap offers crypto-to-crypto trading, liquidity provision with fee earning potential, yield farming via LP token staking for extra CAKE rewards, and even a lottery for CAKE prizes.

Mar 21, 2025 at 03:45 pm

• Coin Exchange : Users can easily exchange one cryptocurrency for another on PancakeSwap. For example, you want to exchange Binance Coin (BNB) for PancakeSwap's native token CAKE, or exchange other tokens that meet the BEP-20 standard with each other. On the trading page, users only need to select the currency to be sold in the "From" drop-down menu, select the currency they want to obtain in the "To" drop-down menu, and enter the quantity they want to exchange, and the platform will calculate the number of target currency that can be obtained based on the current market price. For example, if a user holds 1 BNB and wants to change it to CAKE, after operating on the interface, he can obtain the corresponding number of CAKE based on the real-time exchange rate.

• Rich pairs : In addition to the common BNB trading pairs with other mainstream tokens, PancakeSwap also supports a large number of BEP-20 token trading pairs for different projects. This provides a trading place for many emerging crypto projects, and users can participate in more potential project investments. For example, some newly launched DeFi project tokens can be found on PancakeSwap for buying and selling.

• Create a liquidity pool : Users can contribute a pair of tokens such as BNB and CAKE to PancakeSwap's liquidity pool. By injecting funds into the liquidity pool, users can provide liquidity to the market, allowing transactions to proceed more smoothly. When the user decides to provide liquidity, enter the "Liquidity" section of the PancakeSwap website, select "Add Liquidity", then select the token pair to be provided, enter the respective quantity, and click "Supply" after confirming that it is correct. At this time, the wallet will pop up a confirmation transaction window. After confirmation, the user will successfully contribute funds to the liquidity pool of the token pair.

• Earn transaction fees : As a return to providing liquidity, users can receive transaction fees. Whenever another user trades in this liquidity pool, the fees incurred by the transaction are distributed proportionally to the liquidity provider. For example, a liquidity pool generates a handling fee of 100 BNB in one day, and the user's share in the liquidity pool is 1%, so the user can receive a handling fee income of 1 BNB on the same day.

• Pledge Liquidity Provider (LP) Tokens : After a user provides tokens to the liquidity pool, he will obtain the corresponding LP tokens, representing his equity share in the liquidity pool. Users can pledge these LP tokens to the “Farms” section of PancakeSwap. Click the "Earn" menu on the PancakeSwap homepage and select the "Farms" option. After entering the page, scan the listed farms and select the farms that match the LP tokens you hold. For example, if a user holds the LP token of BNB-CAKE, he or she chooses the corresponding BNB-CAKE farm. Then click "Enable" and confirm the operation in your wallet. After that, the "Enable" button will change to "Stake LP". Click this option, enter the number of LP tokens you want to pledge, and click "Confirm" to confirm. After the pledge is successful, you can start participating in the income farming.

• Get extra income : After pledging LP tokens, users have the opportunity to earn extra income, which is usually issued in the form of PancakeSwap's native token CAKE. The amount of income depends on multiple factors, including the number of LP tokens pledged, the annualized rate of return (APR) of the corresponding farm, and the total amount of pledged on the farm. For example, if the APR of a certain farm is 50%, and the user pledged a LP token worth $1,000, then in theory, he would get a CAKE worth $500 a year as a profit.

• Participate in the lottery : PancakeSwap has a lottery system, and users have the opportunity to participate in the lottery. On the related page, users can spend a certain amount of CAKE to purchase lottery tickets. After purchasing the lottery, the system will assign a set of numbers to the user. For example, if a user spends 5 CAKEs to buy a lottery ticket, the system will generate a set of numbers such as "12 - 25 - 30 - 42 - 56".

• Win a generous reward : When the lottery draws, if the user's number matches the winning number, you can win a generous reward. Rewards are usually issued in CAKE or other cryptocurrency. Suppose that a lottery draw is 10,000 CAKEs, and the lottery number purchased by the user is exactly the same as the winning number, then the user can get the reward of these 10,000 CAKEs.