PancakeSwap started out on the BNB Chain back in 2020. Since then, Uniswap has rapidly emerged as the clear frontrunner in the burgeoning decentralized finance (DeFi) ecosystem. It operates on an Automated Market Maker (AMM) model. This makes it possible for users to directly trade tokens peer-to-peer, putting users in complete control and ownership of their assets. In less than a year, PancakeSwap reached over $100 billion in total trade volumes.
PancakeSwap success lies largely in its multi-chain operability and advanced features. The platform is currently supported on nine blockchains, including BNB Chain, Ethereum, Solana, and Base.
PancakeSwap provides different trading fee structures based on the version of the liquidity pool. Version 2 (v2) pools have a constant trading fee of 0.25%. In comparison, version 3 (v3) pools have a complex tiered fee structure of 0.01%, 0.05%, 0.25%, and 1%.
The platform offers a host of other ways for users to earn rewards. Through Syrup Pools, users are able to stake tokens and earn rewards. Please note, a 2% fee goes into effect on all flexible staking rewards. The Prediction Market takes a 3% fee of each round’s total pot, which goes to the treasury. For Perpetual Futures Trading, PancakeSwap charges a 0.02% maker fee and a 0.07% taker fee. Lottery tickets can be purchased for $5 worth of CAKE tokens.
As an example, in late December 2023, PancakeSwap announced that it would lower the maximum supply of its CAKE token from 750 million to 450 million. The platform aims for an annual deflation rate of about 4% for the CAKE token. To do this, every day it releases 22,500 CAKE tokens to provide a hard cap.
PancakeSwap has made significant progress in establishing itself as one of the leading multi-chain decentralized exchanges. The recent launch of PancakeSwap Infinity (v4) is a key catalyst, introducing advanced features such as support for multiple pool types (CLAMM and LBAMM), modular smart contract “Hooks” for customizable trading and liquidity strategies, and comprehensive fee control for liquidity providers. - Messari
