Is PancakeSwap a scam? review and opinion 2022

If you invest in cryptocurrencies, I'm sure you've come across a token called CAKE or wondered where people are buying some of the new cryptocurrencies that are coming out and not yet listed on the scholarships traditional, right?

In that case, I am delighted to introduce PancakeSwap, the exchange decentralized at the time.

In this article, I will tell you what PancakeSwap Finance is, how it works, what is its security and of course, what you can do on this platform.

What is PancakeSwap Finance

PancakeSwap is a DeFi application (decentralized application) that works on the Binance Smart Chain (BSC) to offer its users many methods to exchange and use their cryptocurrencies.

Specifically, PancakeSwap is (currently) the largest BSC-based decentralized application, so it's not just any project.

But PancakeSwap is not a simple stock Exchange decentralized (DEX), it is an AMM platform ( Automated Market Makers). In other words, the asset price of this stock Exchange is not based on the order book as usual scholarships classics, but on an algorithm.

Security Is it reliable?

One of the key points of all investment platforms, whether in cryptocurrencies or other financial assets, is security. Therefore, before embarking on using PancakeSwap, I recommend that you thoroughly analyze the platform and its protection mechanisms.

Analyzing the security of a project like PancakeSwap is very complicated, but fortunately there are platforms like Certik that take care of doing complete security analyzes on projects like this.

Certik bases its analysis on 6 individual studies: Statistical Code Analysis, On-Chain Systems Monitoring, Security Rating on Various Factors, Market Volatility, Governance and Autonomy. Analyzing all the factors, PancakeSwap has a score of 91 out of 100.

Please note that this does not mean that PancakeSwap cannot be attacked or that it cannot have bugs. Therefore, it is important not to invest more than you can lose.

In fact, in 2021 there was an episode in which the security of the platform was compromised, with an attack on the DNS, which caused the company to recommend that people not log in for a time.

Is it a trap?

That a platform is IT secure does not indicate that the platform itself is legal. But the truth is that nothing can indicate that PancakeSwap is a scam.

It is a platform strongly supported by the crypto community and in which hundreds of thousands of people trade cryptocurrencies daily.

Customer Service

Of course, if you are planning to use a platform of this type, you must bear in mind that sooner or later you will have questions. Therefore, before you start trading at PancakeSwap, you must ask yourself how their customer service is.

So what is PancakeSwap's customer service like?

We could define it in one word: non-existent. In fact, if you go to the contact section of their website, you will find the following: “ There is NO customer support for PancakeSwap ».

Please note that this does not mean that if you have a problem there is no way to solve it. If you go to the PancakeSwap docs, you'll find a help tab in the menu where you can see guides, common error sections and even a question and answer section.

If you skim through these tabs a bit, I'm sure you'll find what you need to solve your problem.

However, if even with these you are not able to figure out what is going on, PancakeSwap has opened Telegram groups in which there are users and administrators who can lend a hand.

Of course, PancakeSwap already warns us on its website; Group admins will never send you direct messages on Telegram, so if someone sends you a message claiming to be from PancakeSwap support, you should block that user.

Similarly, PancakeSwap also advises its users never to give their private keys to anyone who asks for them, even if they say they can help us or know how to solve our problem.

Official Telegram groups are linked in the menu of the PancakeSwap Finance website in different languages. Therefore, I recommend you to access and join the group from the first moment, you never know when you might need their help.

How to register?

At PancakeSwap you don't need to register to start trading, just connect your cryptocurrency wallet. The wallets you can currently log in with are:

• Dappradar
• Trusted portfolio
• MathWallet
• Token Pocket
• Wallet Connect
• Binance Chain Wallet
• SafePal Wallet

To connect your wallet, all you have to do is click on the button that says “Connect” in the upper right corner. If you have any doubts on how to connect your wallet, you can check the FAQ section or click on the help button that appears when you press the “Connect” button.

How does it work?

Like I said, PancakeSwap is a exchange decentralized MA, but what implications does this have and how does it affect trading?

The first thing you need to understand is that in a exchange conventional decentralized operations are between users' wallets or purses.

In other words, if you want to buy Cardano with Tether, there is someone who wants to receive Tether in exchange for Cardano, at that exact moment, at the same price. However, in exchanges AMM, there is no counterpart, that is to say, you do not need anyone else to operate.

So how can you open the trade?

This is where the name comes from. scholarships MA( Automated Market Makers), since they are responsible for creating a smart contract who is your counterpart.

And yes, you are right, if there is no quid pro quo, someone has to create the contract, i.e. the smart contract must have cash for you to operate. And that's where the number comes in. liquidity providers(LP).

Those responsible for providing liquidity to the market voluntarily deposit their cryptocurrencies and/or tokens in a liquidity pool. Right now you might be wondering why anyone would do that, right?

Well, as you can imagine, it's all about the money. Liquidity providers are rewarded by the platform for the simple fact of depositing their funds in these reserves. And the answer is yes, you can also be a liquidity provider, although, as I will explain later, it also carries risks.

Products

One of the reasons why PancakeSwap is the main stock Exchange AMM of Binance Smart Chain is because of the many services it offers to the investing community. These are the main ones:

Exchange-Trading

Naturally, PancakeSwap offers its services as what exchange to buy hundreds of cryptocurrencies and tokens. For this you will have to connect a wallet with funds and use them to buy the token you are interested in.

Right next to the exchange itself, you will find a “Settings” icon where you will need to edit your order details. Concretely, there are 2 parameters that are of vital importance:

• Slip tolerance: we could translate it as “slippage tolerance”, and it basically refers to the margin of error at which you are willing to buy your tokens. For example, if you have a tolerance slippage of 1% and you are going to buy 100 TRON tokens, you might buy 99 or 100.
• Transaction time: This is the time it will take for the transaction to execute. If after this period the purchase has not been executed, it will be deleted.

But what does one thing have to do with the other? If you select a slip tolerance very low and you want the transaction to be completed in a very short time, it may fail because it is a very difficult transaction and vice versa.

Add liquidity

To continue with the topic of liquidity providers mentioned earlier, you should know that anyone can add liquidity to the market and start getting rewards from it.

To do this, simply access the section of cash and add your tokens to what are called liquidity pools, which are the “pools” where the tokens of all the people who, like you, want to add liquidity to the market are deposited.

To deposit cash, you need to bring 2 tokens, for example CAKE and ADA. Thus, you will receive a number of CAKE-ADA LP tokens. Depending on how many tokens you have, you will have a larger or smaller portion of the pool for that particular LP token.

You can of course cancel this action by withdrawing liquidity from the market and obtaining your ADA and CAKE tokens separately. However, the idea is to do this when you've earned your rewards.

But what rewards are we talking about? When a user uses PancakeSwap to buy or sell tokens, they pay a 0,2% commission. From this commission, 0,17% is added to the pool of the pair in which you made this trade.

Continuing with the CAKE and ADA example, if we assume that there are a total of 10 LP tokens in the CAKE-ADA pool and one person trades 10 CAKE for 10 ADA and another person trades 10 ADA against 10 CAKE, the pool will go to have 10 LP tokens.

Since you have a number of LP tokens from this pool, their value has increased, so you can exchange them for the normal tokens and enjoy your return. But as I mentioned before, this comes with a risk; la impermanent loss.

In a nutshell, this risk refers to the fluctuation in the price of cryptocurrencies. That is, you may actually have more cryptocurrencies or tokens than before, but if the fiat price of those tokens is lower, you are actually losing money.

However, this is only a problem if you are not adding liquidity to a market that you believe will not appreciate over the long term. Also, you can enjoy your LP tokens and get rewards from LP token farms by farming.

Lottery

PancakeSwap brought the lottery or even gambling into the cryptocurrency world. As in real life, it takes money to buy a ticket or a lottery ticket, in this case it must be done with CAKE (1 CAKE = 1 ticket).

When you buy the ticket you will see a 4 digit number which has been randomly generated, for example: 1 – 2 – 3 – 4. To win the lottery jackpot you need these 4 numbers to match the 4 numbers winners in the same order.

The current PancakeSwap lottery prizes based on matching numbers (always in the same order) are:

• Match all 4 numbers – 50% of the pot (or split if more than one person has the same number).
• Match 3 numbers – 20% of the pot (or split)
• Match 2 numbers – 10% of the pot (or split)

Farming

Le Yield Farming or Farming to dry is all about “cultivating yields” through your crypto- currencies. In other words, earn more crypto using your crypto. And yes, just as you think, the farm is to lend your cryptocurrencies to other investors in exchange for a return, just like a bank that offers a loan.

If you want to grow in PancakeSwap, you need to go to the section of the menu that says “Farming” and select the farm you are most interested in. To access any of these farms, you must first have the LP tokens that are farmed here.

But let's talk about the important, how much can you earn on farms?

Well, believe it or not, there are farms that offer returns of over 500% per year alone. for the deposit of your tokens.

You can see profitability in a column with the heading “APR”, although if you look closely you can see how this number changes.

Precisely, there is the trick of farms, the profitability they offer depends on many factors, including the supply and demand of said tokens.

But always remember this: the higher the yield, the greater the risk of default .

NFT

NFTS stands for ( New Technology File System ), and in case you don't know, it's a way to create a unique, identifiable file. For this reason, many point out that this will be the way of making art in the future.

However, in PancakeSwap they have a different function, which is that you can create a profile on the platform and use an NFT as your profile picture. Not only will this give you a better look, but it will also give you access to special events.

In other words, they are like a VIP pass within the platform. Of course, this has a cost, and in this case it is 0,5 CAKE.

CAKE token

PancakeSwap launched its token, CAKE, in 2020. It is a Binance Smart Chain BEP-20 token.

La main function of this token is not speculation, but to provide constant liquidity to the market on PancakeSwap .

This token has done particularly well over the past few months and, at the time of writing, it has a market capitalization of around $5,5 trillion, ranking 37th on CoinMarketCap.

Where will we see it in the future?

It is impossible to know, although given all the distance it has left and the popularity the platform has achieved in such a short time, it is easy to think that it will be with a much greater value.

Platform and commissions

Although PancakeSwap might seem like a rather complicated platform, the truth is that it's quite easy to use and navigate through its different sections. The most important parts of the platform are:

• Trade : trade is not a heading as such, but a set of headings which are grouped together in the menu under this name. The main sections grouped here are:
  • Exchange
  • liquidity
  • Bridge
• Farms – Here you will find all the farms where you can get rewards for your LP tokens.
• Polish : in this section you will find syrup pools, which in a nutshell are used for bet CAKE tokens.
• Lottery – This is the place to buy your lottery tickets and where you can find information about current draws.
• More : here you will find all the necessary links to access the help area, read the PancakeSwap blog or view the documents on the exchange .

PancakeSwap is powered by the Binance Smart Chain, one of the cheapest blockchains on the market, especially compared to Ethereum and Bitcoin chains.

For this purpose, PancakeSwap charges a 0,2% commission for each transaction .

Conclusion – Final Opinions

In short, PancakeSwap is a very useful platform for everyday cryptocurrency investors, especially if you want to get your hands dirty and are not satisfied with buying Bitcoin and Ethereum.

It's a very recent platform (it appeared in 2020), so the opportunities for growth and improvement that await us are incredible. However, it wouldn't be the first platform with a big projection that comes to nothing.

For this reason, I recommend you give it a try so you can draw your own conclusions about the quality of the platform, its usefulness, and the chances of it becoming one of the decentralized apps every investor should use.

More information on website.