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PancakeSwap has been a big player in the DEX, or decentralized exchange sector, for quite some time. A native to BNB Chain, and only slightly different than some other established platforms like UniSwap, PancakeSwap uses BEP20 tokens, a specific token originally developed by Binance. Even with the capability guidelines of the BEP20 standard, PancakeSwap makes it possible for users to swap coins for other coins without the use of a middleman. The platform cleverly markets itself with three ways users can try their hand at crypto: trade, earn, win.
Trade, earn, and win
Users can instantly trade tokens with no account or registration required. Because they run on BNB smart chain, trading fees are lower and a decentralized exchange allows users to trade directly from their wallet apps.
PancakeSwap stakeholders can earn $CAKE and other free tokens easily with high interest rates. Users can stake $CAKE and earn free tokens with Syrup Pools, while users who are willing to take on more exposure to market fluctuations can stake LP tokens and earn higher APR using Yield Farms. Users whose trading pairs are not supported on the Farms page can still earn trading fees by staking in Liquidity Pools.
The platform "makes money fun" by giving users access to the PancakeSwap Lottery, chances to win NFT collectibles through trading competitions and games, and winnings for BNB price predictions happening every five minutes.
Tokenomics 2.0
PancakeSwap recently shared its governance proposal for what they're calling the Tokenomics 2.0. The proposal, introduced in May 2022, earned around 11 million $CAKE votes, with a whopping 98% in favor, but it is still unclear if v2 of Tokenomics has been fully implemented. However, the proposal does include some changes that DEX users may find valuable. Probably of highest mention is the updated 750 million $CAKE max supply. Previously, the platform had no cap on token supply, causing inflationary concern for many.
PancakeSwap plans to introduce the new cap along with revised Tokenomics for locked $CAKE. It also plans to provide incentives for smaller effective circulating supply. The proposal states intentions to retain most $CAKE use-cases and add use-cases like weighted voting, boosted farm yields, and boosted IFO benefits for locked $CAKE. The v2 lite paper states a prediction of about 3 years for the current circulating supply to reach the 750 million cap, giving PancakeSwap a much longer runway than other competing decentralized exchanges.
The bottom line
This well-known DEX may have locked in an increase of stakeholder confidence and overall value as it revamps its $CAKE Tokenomics. Plans to implement a token supply cap of 750 million could help combat previous inflation and lead to a higher, consistent overall value for the BNB chain. DEX users should keep an eye out, as the exchange promises a timeline for implementation to be "soon."
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