PancakeSwap is a decentralised exchange (DEX) protocol designed for token swaps, liquidity provision, and staking, operating on the Binance Smart Chain (BSC). It employs the Automated Market Maker (AMM) model, enabling trading without relying on traditional order books. Key features of PancakeSwap include low transaction costs, fast trade execution, and a variety of financial products such as lotteries, NFT marketplaces, and Initial Farm Offering (IFO) launches.
PancakeSwap utilises the AMM system, enabling users to trade cryptocurrencies via liquidity pools instead of traditional buy and sell orders. This model is supported by Binance Smart Chain's Proof of Staked Authority (PoSA) consensus mechanism. The platform employs smart contracts to manage these liquidity pools, execute trades, and handle staking. PancakeSwap's Smart Router links various trading algorithms to ensure optimal liquidity and pricing across its ecosystems, with its code being open-source and available for review.
PancakeSwap offers multiple use cases across the decentralised finance sector, including:
PancakeSwap was launched in September 2020 as a fork of SushiSwap, designed to operate on the BNB chain. It has since achieved significant milestones, such as launching PancakeSwap V3 in April 2023 with improvements in user experience and capital efficiency. Significant growth was noted with its market share jumping by 110% between Q1 and Q2 2023. The platform continues to expand, offering new products and services, including a Revenue Sharing program and various blockchain-based games. The team behind PancakeSwap remains anonymous, working under pseudonyms like Hops and Thumper.