Cointelegraph By Marcel Pechman
Launched in September 2020, PancakeSwap is a decentralized exchange (DEX) running on Binance Smart Chain. Instead of allowing its users to trade ERC-20 and ERC-721 tokens, the DEX focuses exclusively on Binance Chain BEP20.
By using an automated market maker (AMM), the DEX allows tokens to be exchanged with no need for order books. This is quite similar to Uniswap’s liquidy pools which are automated by smart contracts.
In addition to its traditional functions, PancakeSwap offers staking for its liquidity providers. There’s also a lottery for users holding 10 or more CAKE and by opting for a chain with much lower transaction fees than Ethereum, PancakeSwap offers a complete solution for decentralized finance (DeFi) enthusiasts.
Liquidity Providers stake their tokens in pools, allowing the DEX to run its automated market maker smart contracts. In exchange, those stakers are rewarded FLIP tokens. These FLIP tokens can also be staked in exchange for CAKE tokens.
Staking capabilities expand
Launched by anonymous devs and governed by its community, Pancake found its niche among Binance users. Users pay a 0.2% trading fee on every token swap (trade), while 0.17% goes back to the liquidity providers. The remaining 0.03% is sent to the PancakeSwap Treasury.
Even though it launched only five months ago on network that is much smaller than Ethereum, PancakeSwap has already risen to become the eight ranked DEX.
To manage the DEX governance system, another token called SYRUP was created and these can only be obtained by staking CAKE tokens. In addition to providing voting rights, SYRUP tokens also function as lottery tickets.
According to PancakeSwap’s website, 75% of the newly-minted CAKE tokesn are assigned to farmers, while 25% is allocated exclusively to SYRUP holders.
As depicted above, PancakeSwap’s daily volume has been skyrocketing and as this occurred CAKE’s value rose by 300%.
The platform’s developers and community have also listed several potentially interesting developments that combine the NFT world with lending and there are a series of proposals for upgrading or customizing the user interface.
CAKE’s issuance schedule raises concern
While CAKE has been rising in value, an area of concern is its potential infinite supply. 25 CAKE are issued per block and redistributed to liquidity pools and the lottery for SYRUP holders.
On the other hand, an embed burning mechanism includes 9.1% of all the farmed CAKE tokens, 10% of the lottery tickets and 100% of the fees raised in its Initial Farm Offerings (IFO).
The past two weeks have shown that the DeFi sector and wider crypto sector is in desperate need of an alternative to the Etheruem network.
PancakeSwap could possibly be an exciting alternative as the platform is focused on combating the high fees charged on the Ethereum network. The PanCakeSwap community also seems focused on maintaining a balanced issuance rate and incentives that will encourage growth of the DEX ecosystem.
In the current high fee situation, the longer it takes for Ethereum’s second layer capabilities to emerge and solve the current issues, the higher CAKE tokens’ potential is.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Price analysis 2/26: BTC, ETH, ADA, BNB, DOT, XRP, LTC, LINK, BCH, XLM
One of Switzerland’s leading banks now offers crypto trading
Cointelegraph By Brian Quarmby
Bordier & Cie, a Swiss financial institution operating for more than 170 years, has announced a partnership with digital asset bank Sygnum to allow its customers to purchase crypto assets.
The integration with Sygnum’s business-to-business banking platform allows Bordier’s clients to purchase Bitcoin (BTC), Ether (ETH), Bitcoin Cash (BCH), and Tezos (XTZ).
The announcement describes the move as “lay[ing] the foundation for a broader offering of regulated digital asset products and services,” including options and tokenized asset classes. Bordier managing partner Evrard Bordier said:
“By partnering with Sygnum Bank, we are providing our clients with a one-stop, integrated solution while empowering them to invest in this new, high growth asset class with complete trust.”
Bordier noted the move was driven by increasing demand from clients looking to diversify their portfolios with new assets. The firm emphasized the lack of correlation between the cryptocurrency and mainstream financial markets, describing crypto assets as a “powerful tool to enhance diversification and achieve superior risk-adjusted returns.”
Bordier & Cie is a Geneva-based private banker founded in 1884, that has been owned and managed by the Bordier family for five generations. The bank’s introduction to crypto follows that of many other large institutions looking to adopt cryptocurrency in 2021.
Ethereum exodus continues as Binance ‘helps,’ Feb 17–24.
Cointelegraph By Andrey Shevchenko
The parabolic rise of the Binance Smart Chain has been all over the news this week, aided by a few seemingly unfriendly moves by the exchange itself.
It started on Friday, when Binance suddenly froze withdrawals of Ethereum-based assets for about one hour. Many interpreted it as a move against the blockchain and its ecosystem, given that the cited reason was “congestion issues” — something one hardly imagines is a problem for an exchange, unless they shoulder withdrawal costs for the user.
The day after, FTX started shaming Binance for excessive promotion of BSC on the exchange. Specifically, FTX was apparently “spending millions” in failed deposits that came over the Smart Chain but were meant for Ethereum. FTX’s accusation toward Binance, one of its investors, is that the exchange put BSC as the default option for withdrawing many ERC-20 assets, which caused a lot of failed deposits to FTX.
I can’t say I’ve ever noticed Binance Smart Chain being “the default option” for withdrawals. BSC is the first listed when you attempt to withdraw something like USDC, though it does not actually select the blockchain for you. Still, I can see how some newbies could get swindled by this. People overestimate the degree to which terms like “ERC-20” are known in the casual crypto community. Testing the withdrawal now, Binance forces you to go through a quiz where you confirm you know what you’re doing by selecting BSC. I have no idea when this was introduced, but it’s not impossible that it’s a response to FTX’s statements.
Overall though, there’s nothing inherently wrong with one company using its products to promote another of its products. From the official responses it seems that the Ethereum congestion incident won’t happen again because they “upgraded the systems.”
Cheap tricks would never be able to undermine Ethereum without there being an underlying fundamental weakness. And I think we’ve all had enough with Ethereum gas fees. I tried a non-Ethereum DeFi product recently, and it felt so good to pay just a few cents for a complete interaction.
Binance Smart Chain is already processing more transactions than Ethereum and has over 5 million unique wallets. Ethereum, with its much longer history, is currently sitting at 140 million wallets in total.
Ironically, Ethereum fans should secretly want the bull market to end right now. The longer it goes on, the more gas fees will remain high, and the more people will want to migrate away and seed other environments.
Second largest liquidation day in DeFi history
Speaking of the end of the bull market, a massive slide in crypto markets triggered some $24 million in liquidations on Tuesday, the second highest loss in DeFi history. It would’ve been the highest if not for that infamous day in November when Compound thought Dai was worth $1.3.
The firesale was triggered by nothing in particular, though I suspect that rising bond yields are having their effect on the riskiest of assets on Wall Street, of which Bitcoin is the quintessential representative. And then Bitcoin dragged the rest of crypto with it.
I don’t normally talk about price because I’m not a financial advisor or even a successful trader. But I am feeling a lot of fundamental and sentimental indicators of a coming correction, ranging from a wavering stock market to, well, the strength of Tuesday’s dump.
To top it all off, my non-crypto feeds are being invaded by crypto stuff, which is never a good sign. I certainly hope that I’m misinterpreting what is actually unprecedented adoption and acceptance, but let’s face it — it’s all about price for now, while fundamentals are still lagging.
With layer two platforms and new blockchains coming online, we may get something useful out of crypto and DeFi soon. But everything could happen before we get there. Be especially careful right now and, most importantly, don’t get liquidated.
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