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PancakeSwap is a decentralized exchange platform based on Binance Smart Chain (BSC) and allows users to replace BNB tokens with other tokens minted on the BSC blockchain. PancakeSwap has its own token known as CAKE. It is one of the greatest DEX platforms with users joining PancakeSwap every day. Therefore, this guide aims to help with some of the most common and frequently asked questions.
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Frequently Asked Questions about PancakeSwap
We will go through the usual inquiries regarding the replacement of pancakes. The goal is to help people who are new to the platform to better understand the features and services that the platform offers.
Q. What are the benefits of using PancakeSwap?
AND. PancakeSwap is a decentralized stock exchange. This means that it has all the advantages of decentralized exchange, including without the need for verification. To set up your account on PancakeSwap, you just need to add your wallet. KYC and other proof of identity are not required to purchase cryptocurrency.
Another advantage is that PancakeSwap is based on the Binance Blockchain also known as the Binance Smart Chain (BSC) which is different from Ethereum Blockchain. This means that transaction fees in the BSC are slightly lower compared to Ethereum gas fees
PancakeSwap also hosts competitions, often adds new pools, has its own lottery system that allows you to earn CAKE tokens.
Also, read | The best places to buy anonymous Bitcoin without KYC
Q. What cryptocurrency is used for PancakeSwap?
AND. PancakeSwap uses Smart chain BNB tokens. They are interchangeable with regular BNB tokens and have similar values. But only the BNB Smart chain can be used on the platform.
You can buy a regular BNB through any crypto exchange, or preferably Binance, then replace it with the BNB Smart chain at Binance or Trust Wallet. If you use Metamask, you first need to replace BNB with Smart Chain BNB and then transfer it to Metamask Wallet to use it on PancakeSwap.
Q. How to earn passive income on PancakeSwap?
AND. You can earn passive income on PancakeSwap by investing CAKE which is the original token for PancakeSwap. You can invest for a certain period of time and earn interest on it. It is a safe and low-risk method. Another method is the cultivation of yields which involves the acquisition of pairs LP (liquidity pool) tokens in the pool and earnings from transaction fees. Yield cultivation involves high risk.
Related article 3 best ways to earn passive income from cryptocurrency
Q. What is Syrup Pool in PancakeSwap?
AND. Syrup pools allow you to invest a certain amount of your CAKE funds. You can lock your CAKE tokens to a predetermined set of times and then earn free CAKE tokens as interest. There are other pools where you can invest other coins to earn interest. This is a fairly simple and low-risk method of earning free tokens.
Q. What is pancake growing?
AND. Agriculture refers to Yield agriculture. This includes providing a pool of liquidity with a pair of tokens that can be exchanged in an exchange. These tokens are then used to fund the exchange. PancakeSwap allows you to seamlessly replace tokens without waiting for a buyer or seller. This is possible with the help of the Liquidity Half.
People who invest their tokens in the pool earn a high return margin that the exchange collects from transaction fees. Thus, the amount of earnings from Yield Farming is based on the number of transactions that occur during the day.
Q. What is slip tolerance?
AND. Slip tolerance is a transaction fee for exchange or exchange on PancakeSwap. It is measured in percentages and is usually low at about 0.1% to 0.5%. But it can be different based on the tokens themselves. If you buy SAFEMOON then you will have to pay 12% slip tolerance.
The fee for a transaction on the BSC is relatively less than any Ethereum-based exchange. But you still have to pay a small amount. This fee is used to pay yields to farmers.
Q. Can I buy NFT on PancakeSwap?
AND. Yes, PancakeSwap recently added NFT market on their exchange. Because the platform is based on the BSC blockchain, it contains NFTs built on the Binance Smart Chain. You can buy them with BNB tokens.
It also supports personalized profiles where you can choose your name, join a team, and select NFT as your profile picture. PancakeSwap is already planning to buy and sell BSC NFT and third party NFT gamification that will be added to the platform later.
Also, read | How to create and sell your own NFT in 3 easy steps
Q. What is an IFO?
AND. It’s IFO Initial offer of the farm. Many newly minted tokens are listed on the stock exchange before being available on other centralized exchanges. Many people like to earn any profit that these new tokens earn in the beginning.
So, you can invest your CAKE tokens to participate in the IFO and these chips are burned and you in turn get forged chips.
Users can invest as many CAKES as they want, and the amount of funds that is not used or remaining after the sale is returned to the user. This is known as Overflow.
Finish
We discussed some of the key components of PancakeSwap and learned about its work. We hope you have learned something valuable from this article. PancakeSwap is a great alternative to other Ethereum-based alternatives like Uniswap and because it is community driven and constantly updated by developers.
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