Pancakeswap Coin: Benefit from the decentralized crypto exchange as an investor
In the context of this article we will deal with the Pancakeswap Coin (CAKE). Pancakeswap is a decentralized crypto exchange. This means that there is no central exchange operator. Pancakeswap was only founded in 2020, but the crypto exchange is now very popular. As an investor, you can benefit from the crypto currency CAKE and trade it with a CFD broker, for example.
- Pancakeswap is based on the popular crypto currency Binance Coin
- The decentralized exchange is very popular
- The demand for CAKE is also increasing
- The Pancakeswap Coin thus offers high price potential for the investor
What is the Pancakeswap Coin?
- Pancakeswap was launched in December 2020
- It is a decentralized exchange for crypto currencies
- Uniswap served as a model
- Unlike Uniswap, the Pancakeswap Coin is not based on Ethereum (ETH), but on the Binance Coin (BNB)
- The Binance Coin has the advantage that transactions are faster and, above all, cheaper
- The Pancakeswap Coin was well received by the market
- The coin now has a market capitalization of over 3 billion euros
- The coin thus makes it into the top 50 crypto currencies
- As an investor, you can trade the Pancakeswap Coin as a CFD, for example
Pancakeswap Exchange: About the concept
Bitcoin was the first cryptocurrency to hit the market in 2009. The Crypto Coin is based on blockchain technology. From today’s perspective, however, the Bitcoin blockchain is quite simple and does not have many functions. Therefore, the Bitcoin can only be used as a means of payment.
Things look completely different with Ethereum, for example. The blockchain can be expanded to include additional functions. To do this, one uses the so-called smart contracts. This is software that you can imagine like plugins in an Internet browser. In this way, the functionality of the cryptocurrency can be expanded very much.
The difference between fintech and defi
Many investors nowadays are familiar with the concept of FinTechs: These are modern companies that are trying to use new technologies in order to be able to offer new offers for financial services.
However, it is only about using an existing business model and improving it. For example, there are FinTech payment service providers who use the Internet to be able to offer payments worldwide faster and cheaper than traditional banks.
In the background, however, all payments always run centrally through the company. The situation is different with the so-called DeFis.
Pancakeswap: the making of Defi
A DeFi is a decentralized financial service provider. The aim here is precisely that a central body is no longer needed as a middleman. You can imagine, for example, that two users sign a loan agreement independently of a bank.
Blockchain technology can already be used for this today. Using smart contracts, for example, it is possible that credit can be granted entirely via the blockchain. In this case, a bank is no longer required.
Other areas of application for DeFis are, for example:
- Digital stocks that are based on smart contracts and that can, for example, distribute dividends independently
- Insurance contracts based on the blockchain
- Real estate transactions that run through smart contracts
DEX: Decentralized crypto exchanges
For example, decentralized crypto exchanges rely on the same concept. This is also known as DEX.
Uniswap in particular is very well known in this context. The system is based on the aforementioned Ethereum blockchain . With the help of smart contracts, cryptocurrencies can be traded. A central exchange is no longer required for this.
The disadvantage of Ethereum, however, is that transactions are often slow. In addition, the fees for the transactions can be quite high.
For this reason, the developers of the Pancakeswap Coin decided to use Binance Coin instead of Ethereum as the basis .
Pancakeswap Coins are based on the Binance network
The Binance Coin offers the same functions as Ethereum. However, transactions can be much faster. Another decisive advantage is that the transaction costs are very low and almost negligible.
This is why the Pancakeswap Coin also uses the Binance network.
THE BINANCE CRYPTO EXCHANGE
Binance is one of the largest crypto exchanges today. The exchange now even has its own crypto currency. This is called Binance Coin (BNB). The market capitalization of the coin is considerable, which is particularly evident in comparison with other major crypto currencies:
- Bitcoin: 1 trillion euros
- Ethereum: 465 billion euros
- Binance Coin: 80 billion euros
- Solana: 62 billion euros
- Tether: 61 billion euros
The Crypto Coin is a success story
As I said, Pancakeswap is a decentralized exchange for crypto coins. The liquidity pool is created by the fact that the users provide coins. For this they contain compensation.
With Pancakeswap, for example, there is also the special feature that users can buy lottery tickets. Winners are drawn at regular intervals, who then receive a certain number of coins.
The functions of the Pancakeswap Coin are constantly being expanded. This is one of the reasons why the coin is very popular with many users.
As I said, the cryptocurrency didn’t hit the market until September 2020. The market capitalization now amounts to more than 3 billion euros.
In order to benefit from the Pancakeswap Coin as an investor, it makes sense to trade the cryptocurrency. There is no difference to trading with Bitcoin or Ethereum.
The Pancakeswap Coin started in September 2020 at a price of 1.36 USD. After that, there was profit-taking: the prices fell into the USD 0 range. However, these low ratings were then used by many investors to get into the cryptocurrency.
In the months that followed, a bottom was able to form, and prices also rose slowly. In January 2021, the Pancakeswap Coin had managed to reach the USD 1.36 area again.
Strong price movements in the Pancakeswap token
In the following weeks there were massive price increases. A high was reached in the area of 36 USD. In a short period of time, investors were therefore able to achieve a profit of 2,500%.
Then there was another correction. In May 2021, a new all-time high was reached again, namely at the rate of USD 47.
Since then, the Pancakeswap Coin has been in a correction again.
Investors therefore currently have the opportunity to get into the cryptocurrency at low prices.
Analysts assume that the cryptocurrency has the potential to rise above 100 USD.
Trade in cryptocurrencies
As I said, the Pancakeswap Coin offers interesting opportunities for investors. To trade in cryptocurrencies, for example, you can use an exchange for cryptocurrencies. There are also digital marketplaces available.
However, in these two cases you need a crypto wallet . It happens again and again that crypto wallets are lost or attacked by hackers.
For this reason, many investors nowadays are choosing to trade cryptocurrencies as CFDs as well. Because in this case no crypto wallet is required.
The trading CFD has this many more advantages:
- You get a leverage from the brokers, with which the necessary trading capital can be reduced
- You can trade different base values as CFDs on a single trading account
- These include, for example, stocks, currencies, indices, precious metals and crypto currencies
- Normally, as a customer, you can use a good trading platform to trade with the mentioned financial products
- Many brokers provide you with a demo account, on which you can also try out trading with the Pancakeswap Coin, for example
Trade cryptocurrencies on favorable terms
Many CFD brokers provide you with good conditions. For example, it is usually possible to create an account free of charge. There is usually no charge for maintaining the account.
However, one should pay attention to the spread. This also applies if you want to trade with the Pancakeswap Coin.
In our test, we check exactly how good the trading conditions are with a broker. For example, we also investigate which payment options are available. Examples for this are:
- Credit cards such as Mastercard and Visa
- Payment service providers such as PayPal or Skrill
Trade the Pancakeswap Coin with a regulated broker
With a good broker, however, it is not only important that the trading conditions are favorable. Rather, one should also make sure that the provider is regulated by a state authority.
We recommend choosing only those providers who are based in the European Union. The EU stipulates that there must be regulation. In addition, it must be ensured that the customer deposits are protected by a deposit guarantee.
To further increase security, customers’ deposits should also be kept in separate accounts.
We also address the points mentioned in our reviews. The best providers can be found very easily with our broker comparison.
Benefit from the training courses offered by brokers
Trading with Pancakeswap Coin as a CFD, for example, has the advantage that brokers often provide you with good training offers.
For example, you can use videos to familiarize yourself with the broker’s platform. Often there are also webinars that deal with crypto trading.
As part of our reviews, we also discuss how good the broker’s training offers are.
Use Analyzes from experts
With many brokers, for example, customers also have the option of using free analyzes. These are often created by experts.
It is also useful if you can use an economic calendar. Because it contains important dates from the financial sector. When trading crypto coins, for example, you should be careful when the central banks change key interest rates. Because this can often have an impact on the prices of Bitcoin and Pancakeswap Coin.
These additional offers are usually available free of charge.
Test trading with crypto coins on a free demo account
The prices of cryptocurrencies can often fluctuate greatly. It is precisely for this reason that many investors are interested in digital currencies.
However, before actually trading with Pancakeswap Coin, it is advisable to first try out trading on a demo account.
The broker provides one of the brokers with virtual credit on the demo account. In this way, you can then try out trading without any risk.
On the demo account, for example, you also have the opportunity to test different strategies.
The demo account is also ideal for trying out trading with different base values. The following can be considered:
- Stock CFD: For example Pancakeswap Coin
- Forex CFD: For example euros and pounds sterling
- Indices CFD: For example Dow Jones
- Commodities CFD: For example oil
With most brokers, it only takes a few minutes to open a demo account.
Conclusion: benefit from the decentralized crypto exchange
In the past, the blockchain could only be used to process digital payments. As shown, however, cryptocurrencies offer far more application possibilities these days.
With Ethereum, this is made possible by so-called smart contracts. This means that the functions of the blockchain can then be greatly expanded. For example, it is also possible to issue blockchain-based loans. A bank is then no longer required. Digital exchanges are also possible in this way.
For example, Pancakeswap is a decentralized exchange for crypto currencies. The specialty is that no central point is required. The Pancakeswap Coin builds on the popular Binance network.
The advantage of Binance is that payments are faster and cheaper than with Ethereum.
Although the pancakeswap coin didn’t hit the market until 2020, the cryptocurrency was able to spread very quickly. The Crypto Coin should also develop positively in the future.
In order to benefit from this trend as an investor, it is advisable to invest in the coin. This is particularly easy if you choose a CFD broker.
It is very easy to find very good providers if you use our broker comparison.