Create a PancakeSwap-like DEX
The crypto industry as a whole has revolutionized the digital realm. The boom of decentralized finance (DeFi) has also transformed the finance world with speed, inclusion, and autonomy as the key features. These features are what the traditional financial world was lacking.
The development of decentralized exchanges, or DEXs, including PancakeSwap, UniSwap, and SushiSwap, is growing fast. DEXs became a space where users can connect to autonomous markets in a generally safer environment.
But why Defi development is so popular that so many businesses are looking for an experienced blockchain development company to create a Pancakeswap like DEX? That’s what we want to chat along in today’s blog post.
Pancake what? — PancakeSwap 101
The Binance-made PancakeSwap decentralized exchange is the most popular on Binance and the 4th best crypto exchange overall. PancakeSwap features an expansive array of tools and has a substantial user base.
PancakeSwap’s design facilitates secure trading of BNB (Binance coins) and is used to also work with BEP-20 tokens. Some experts call PancakeSwap the Uniswap clone, but though the two share some similarities like swapping coins without third-party involvement, they are not the same. PancakeSwap uses Smart contracts that allow more secure trading, as they facilitate automatic execution of the trade, therefore lowering the risks.
Besides, many tech experts note that the platform is a robust and cheap alternative to Ethereum. It also has been approved by many reputable blockchains security firms like Slowmist and Certik. As PancakeSwap is open-source, its Smart contract codes can be reviewed by different committees.
What functions PancakeSwap has to offer?
For those who don’t know how DEXs like PancakeSwap work, it’s entirely different than centralized exchanges. The Automated Market Maker is one of its core functionalities that shows that people who use PancakeSwap don’t need intermediary help to facilitate trading.
Users deposit funds onto the exchange platform, and they become liquidity providers. PancakeSwap like AMM’s conduct trades by subtracting liquidity from one part of the pool and adding it to the others. By liquidity pool, we mean funds, that people deposit from all over the world, providing crypto trader liquidity.
With such a system, buyers don’t have to wait to be matched with vendors, or v.v. When someone wants to swap one token for another, they deposit tokens and withdraw the ones they want. Everything is done through the digital wallet, which allows users to keep their crypto safely.
Access on the PancakeSwap platform is supported through dApps (decentralized applications):
- PancakeSwap treasury
By the way, the last one covers the platform’s funding, which is 15% of all the trading fees.
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Peculiarities Of PancakeSwap Exchange
As we previously mentioned, commonly decentralized exchange app development is mainly made on Ethereum. But, the PancakeSwap is an exception. Being developed on a Binance Smart Chain explains many of the unique properties and benefits that the platform has.
But what are the benefits of being not the Ethereum-like exchange?
- Lower transaction fees
- Rapid confirmation times
- Faster execution of trades faster
All of those are possible, as PancakeSwap has a lower usage rate if compared to Ethereum-like exchange. But that’s not all of the benefits that the exchange platform was to offer. There is an extensive range of additional features for the CAKE holders. Some of them provide utility, while others facilitate more beneficial trading.
As a DeFi development German software company, we want to dive a little deeper into the not obvious benefits of this DEX exchange. Let’s take a look at the most prominent secondary PancakeSwap features and explore what benefits they bring to the users.
Extra Yield Farming
Staking supported liquidity(LP) tokens allow PancakeSwap users to get some extra yield. LP tokens bring users CAKE yield. And that’s an example just of one of many farms that the platform offers.
The right APY selection differs from farm to farm, and it can even reach several hundred percent. Currently, PancakeSwap farming APY is leading across several pairs. Therefore, for example, a DUSK-BNB farm earns even more than 200% APY, and users will need to take into consideration potential non-permanent yield losses.
Similar to IDO (initial dex offering), the PancakeSwap exchange allows buying the token early on. And, that leads to a new ICO (initial coin offering) model—initial farm offerings (IFOs). With the popularity of ICO development, IFOs got a lot of attention, before even public launch. But what is the deal with IFOs?
- They allow users to swap their CAKE-BNB LP’s tokens
- Half of the total funds burn in this process (for token deflationary mechanics)
Well-known projects that were launched using ICO and IFOs are Ditto, Hot Cross, and Soteria.
Lottery v2 on PancakeSwap
Lottery features are unusual to DEXs, which makes PancakeSwap unique in a sense. Lottery v2 feature provides a chance of winning an opportunity to lower down a large CAKE pot. To use the chance users must buy a lottery ticket.
Prices of lottery tickets vary, but currently, they are around $5 in CAKE. However, if a user decides to purchase 100 tickets at once, they can benefit from up to a 4.95% discount. Moreover, the prize pool is 40% of the total, matching all 6 numbers on their ticket. The final prize is shared equally among the winners.
PancakeSwap NFT Collectibles
As our dApp development company also specializes in NFT development service, we couldn’t pass by PancakeSwap NFT collectibles. In 2021, the platform added a new feature of NFT profiles. It opened an opportunity for users to pick an NFT profile picture after they purchased Bunny NFTs available on PancakeSwap.
Is it worth developing DEXs like PancakeSwap?
If keep it short, definitely yes! The main benefit you get if you create a blockchain software like PancakeSwap is that it’s built on the Binance Smart Chain platform, which brings several advantages like:
- Cost-efficient gas fee
- Faster transactions
- PoS mechanism
- Flexibility of Smart Contracts
- Advanced multi-crypto swapping and trading
- Higher yield generation
- Compatibility with other blockchains
The bottom line
DEXs like PancakeSwap led the global growth of cryptocurrencies and increase decentralization. The platform attracted a big market, as it offered a higher level of safety and transaction speed.
We OmiSoft blockchain development company with high expertise in decentralized exchange application development, provide end-to-end decentralized exchange software development services of any difficulty at a reasonable price.
If you are interested in how to build a cryptocurrency exchange hit us up for a FREE consultation with a blockchain engineer and we’ll be happy to help your project succeed.
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