How Does PancakeSwap Work: Basic Ways to Make Money on the Market

The PancakeSwap marketplace is a relatively new decentralized exchange suitable for a variety of cryptocurrency transactions. Based on BSC, the platform conducts transactions through user wallets with minimal commissions and in the shortest possible time.

Over time, centralized trading platforms have ceased to suit most traders. Confidentiality and safety of personal data are essential. The PancakeSwap exchange completely satisfies the requests of such traders.

To understand what is PancakeSwap, let's analyze its primary functions to know how PancakeSwap works.

How does PancakeSwap Work?

The exchange of coins on PancakeSwap takes place in a trading pair without an intermediary in liquidity pools. At this time, third-party users have the opportunity to receive part of the reward from transactions in the pool by investing tokens in liquidity pools.

There's even an auto-bid option that will re-bid your CAKE at least once an hour, continually increasing your rewards.

PancakeSwap allows gaming experiences such as gambling on whether the price of BNB rises or falls for a limited period.

It also has a lottery feature that allows users to buy tickets to win CAKE. DEX offers a wide range of collectible NFT to buy. There are also offers to participate in IFO. You can purchase new coins from start-up projects.

Main Functions of PancakeSwap

Let's consider the main functions that this platform can provide us. At the same time, almost every action involving interaction with tokens will require payment of a commission in a certain amount of BNB.

Exchange

This function allows you to exchange one token for a different one. In the Trade tab under the swap window, there are 3 points:

1. Received minimum - shows how much you will receive if the price changes sharply in the negative direction during the transaction.

2. Impact on price - this is the difference between the market price and the predicted price. In other words, if you conduct a substantial transaction, then the total number of coins received will be reduced.

3. Liquidity provider commission shows how much commission will be taken to pay liquidity providers and the PancakeSwap service itself.

PancakeSwap requires 0.2% per transaction on both sides of the trade.

Farms

The exchange allows earning money by farming tokens. By investing in the liquidity pool, it is possible to get LP coins.

After receiving the desired type of coin, you can go to the farming settings. The settings assume the calculation of profitability and remuneration in CAKE tokens. Setting up farming is simple and accessible to everyone. To do this, you need to follow simple instructions:

1. In the "Liquidity" tab in the "Trade" section, you must select any liquidity pool and redirect your funds to it.

2. In the "Farms" section, you can redirect the received LPs to farming.

3. Everything is ready. You can make a profit and withdraw it to the wallet.

Staking in Syrup Pools

Another good opportunity is to make money using pools.

Staking in Syrup Pools allows PancakeSwap exchange participants to deposit at a percentage the internal token of the CAKE platform and earn different cryptocurrencies, depending on which pool is selected. In this method of investing, the user does not have the risk of inconsistent losses that arise during pharming. The main risks arising from staking are a drop in the prices of invested coins, hacking of smart contacts, and the site's reliability.

The most profitable are pools with auto-replenishment. They appeared in PancakeSwap V2.

Each pool has an APY characteristic - it shows what percentage of income you would receive over the past year if you invested. It is calculated based on current rates and is approximate. It does not guarantee the same profitability in the future. All bets include a 2% commission.

To add funds to the pool, you must first confirm the contract in your wallet by clicking "Enable." You will have to pay a small commission in BNB for this. So make sure you have them in your wallet. To receive a reward, you must click the "Collect" or "Harvest" button. This transaction is also paid, so it is not profitable to withdraw small amounts all the time. If you want to configure the constant receipt of rewards and their addition to the pools, then look at the Beefy service.

Lottery

The PancakeSwap platform has a special section with "Lottery" lotteries. You can take part in them once every 6 hours.

The minimum bet is one ticket. It costs just 10 CAKE tokens. The user can purchase an unlimited number of tickets and increase their chances of winning. Upon purchase, you will receive a 4-digit combination with numbers from 1 to 14. The numbers must match those presented on the page upon completion of the procedure to win the jackpot. If more than two numbers match, you will still receive a prize depending on the size of the pot.

Prediction

All predictions work in 5-minute intervals. The participant needs to predict whether the value of the BNB token will rise or fall before the round begins. If the participant guesses correctly, then he receives a reward. If not, then the entered bet expires. You can place bets on the growth and fall of quotes in the Prediction section. In total, there are 3 phases in the predictions:

1. In it, the user is asked to place a bet on whether the token's value will rise or fall after 5 minutes.

2. Live broadcast. At this stage, quotes are being formed, and the user can watch the dynamics of the price movement for BNB / USDT in real-time. At the end of the phase, the final price is set. On its basis, a decision will be formed whether the user wins or loses.

3. Final. It is intended only for visual acquaintance with the results of the bet and for receiving the winnings.