In This Article
Decentralized exchanges (DEXs) are the hotbeds of on-chain crypto activity, and PancakeSwap (CAKE) is one of the pioneers of the decentralized trading scene. DEXs have become incredibly popular today. They are no longer niche platforms used only by crypto degens and decentralization maxis. More crypto users are learning about the advantages of DEXs, such as self-custody and instant access to newly minted tokens. This has helped the proportion of trading volume on DEXs (compared to centralized exchanges) grow to an all-time high in 2025. One of the DEXs that has gained significant traction of late is PancakeSwap. So, are you interested in using this DEX to explore the world of decentralized finance (DeFi)? In this PancakeSwap review, you will learn ‘what is PancakeSwap,’ how to trade on PancakeSwap, CAKE’s use cases, and more. Let’s dive straight into this beginner’s guide without further ado.
What is PancakeSwap: Summary
PancakeSwap is one of the most popular DEXs in the world. In this article, we will cover everything you need to know about PancakeSwap and its native token CAKE. We will begin by reviewing technical terms readers must learn to better understand the project. Thereafter, we will study how the trading platform came into existence and get to the development team behind the project.
The second half of this PancakeSwap crypto exchange review will focus on the CAKE token. More specifically, we will study tokenomics and cover everything from supply and utility to its economic model. Our PancakeSwap review will also highlight all that PancakeSwap offers, such as a non-fungible token (NFT) trading platform, prediction markets, futures trading, and liquidity pools. Before we end the article, we will discuss the best crypto wallets to use for PancakeSwap and hear what experts have to say about the platform.
Key Takeaways
Terms You Need to Know Before Understanding PancakeSwap
PancakeSwap Review 2025
PancakeSwap is a decentralized exchange that is available across several blockchains, including BNB Chain (BNB), Ethereum (ETH), Solana (SOL), and Base. The platform originally launched on the BNB Chain (formerly Binance Smart Chain) in September 2020. PancakeSwap uses an AMM model to allow users to swap tokens in a decentralized manner. The platform is permissionless, meaning that anyone with a crypto wallet can trade tokens on Pancakeswap, and anyone with cryptocurrencies can supply liquidity to pools and earn a share of the trading fees.
In addition to token swaps, PancakeSwap offers a variety of features, including perpetual futures contract trading, staking, prediction markets, a lottery, and token launchpads. PancakeSwap aims to offer a comprehensive DeFi experience to its users under one roof, a feature not all crypto platforms can claim.
In terms of trading volumes, PancakeSwap is among the top three most popular DEXs in the world for spot trading alongside Ethereum-focused Uniswap (UNI) and Solana-based Raydium (RAY). It is also the largest decentralized application (DApp) on the BNB Chain with a total value locked (TVL) of over $1.68 billion (at the time of this writing), according to DeFiLlama.
History of PancakeSwap DEX
The PancakeSwap decentralized exchange was created on the BNB Chain in 2020 to give on-chain users an alternative platform to trade tokens. At the time, Uniswap on Ethereum was the most popular DEX in the world. However, trading on Uniswap was getting expensive due to the network congestion problems and high gas fees on Ethereum. After PancakeSwap was built on the BNB Chain, it offered faster and cheaper transactions.
The DEX also offered lower swap fees to users, which led to PancakeSwap’s growth and popularity. Within the first year of its operation, it cumulated trade volumes of over $100 billion.
This decentralized exchange has continued to improve its AMM model over the years with the release of stablecoin-focused PancakeSwap StableSwap, customizable PancakeSwap Infinity and PancakeSwap AMM v3. The platform also introduced additional features such as yield farming, staking, initial farm offering and perpetual futures trading.
About the PancakeSwap Team
PancakeSwap was created in September 2020 by a group of anonymous developers. According to Crunchbase, its development team consisted of about 250 members and was based in Unoshima, Fukuoka, Japan.
The project’s official website did not publish any information about its founding team. However, the website shared the social profiles of its development team members, who are called “Chef.” Chef Kids is described as the “Head Chef” of PancakeSwap, and Chef Jackson is the developer lead.
Vision of PancakeSwap Crypto
The vision of PancakeSwap is to provide a decentralized and permissionless platform for users to trade tokens and participate in DeFi activity. PancakeSwap prioritizes low fees and enables customers to retain 100% ownership over their crypto assets while trading on the platform. In contrast, centralized cryptocurrency exchange custodies user funds, which makes traders and investors vulnerable to losing access to their assets in the event of a bankruptcy, hack or token withdrawal suspension.
Additionally, PancakeSwap looks to provide a complete DeFi platform where users can stake tokens to earn passive income, participate in lottery games, trade NFTs and try their luck in prediction markets.
PancakeSwap DEX Tokenomics
CAKE is the native and governance token of the PancakeSwap DEX. Its tokenomics have been upgraded several times over the past years via community governance voting. The section below covers everything you need to know, from the token supply, utility, economic model, to CAKE’s governance protocol.
CAKE’s Token Supply
Here are key points to note about CAKE token supply:
- CAKE’s maximum supply was reduced to 450 million from 750 million in December 2023.
- Its circulating supply stood at 321.62 million tokens, at the time of writing, which came in at about 71.5% of its max supply.
- 22,500 CAKE tokens are emitted per day.
Utility & Use Cases of CAKE Token
Here is what the CAKE token is mainly used for:
- Voting: CAKE token gives holders voting rights to approve or reject network improvement proposals.
- Proposals: Anyone who holds 100,000 CAKE tokens can submit community proposals.
- Staking: Holders can stake CAKE tokens on PancakeSwap’s Syrup Pool feature to earn free tokens.
PancakeSwap’s Economic Model & Incentives
Interestingly, its economic model has been upgraded twice to make the PancakeSwap protocol more sustainable.
According to CAKE Tokenomics 3.0, PancakeSwap aims to keep the annual deflation rate of the CAKE token at about 4% per year. The protocol targets a total CAKE supply reduction of about 20% by 2030. This is achieved with the help of a buyback-and-burn mechanism aimed at making CAKE a deflationary token.
What is PancakeSwap’s buyback-and-burn mechanism, you may ask. The DEX earns fees from different products like spot trading, perpetual trading, prediction market and the lottery. A portion of these fees is used to buy back CAKE tokens from the market and then permanently remove (or ‘burn’) them. This helps to reduce the total supply of CAKE, which is believed to support its value over time.
Here is the breakdown of the CAKE token burn mechanism for each product:
CAKE’s Governance & Protocol Control
Earlier, CAKE holders were required to stake their tokens to earn voting rights through veCAKE tokens. However, the CAKE tokenomics 3.0 upgrade implemented in the first half of 2025 abolished the system.
Now, all CAKE holders have voting rights without the need to stake their tokens. However, holders can no longer delegate their voting rights to third-party voters. Every CAKE holder is required to vote individually. Core proposals to make network changes and improvement can only be proposed by the PancakeSwap Core team. Anyone with 100,000 CAKE tokens can submit a community proposals. These are used to propose ideas and express the community’s point of view.
The PancakeSwap Core team also has veto rights to temporarily pause smart contracts and override a successful gauge vote without requiring a community vote or Snapshot poll.
How Does PancakeSwap Work?
Next on our PancakeSwap crypto review, we will examine how the protocol works. In this section, we will discuss the token standards and smart contracts used to power the PancakeSwap DEX. You will also find information on the application’s scalability and performance metrics.
Token Standards & Smart Contracts
PancakeSwap uses an AMM model to facilitate token swaps. At the heart of the AMM model are liquidity pools, where anyone can deposit their tokens. Liquidity pool’s smart contracts are autonomous. They self-execute token swaps whenever a user initiates the transaction. However, the transaction will only go through if the trader has the required funds and gas fees.
On the BNB Chain, PancakeSwap lists all cryptocurrencies that use the BEP-20 token standard. Similarly, it lists all crypto assets that use the ERC-20 token standard on compatible blockchains such as Ethereum, Arbitrum and Polygon.
Scalability & Performance
PancakeSwap was built for scalability and performance right from the start. It was initially built on the BNB Chain, which made PancakeSwap’s gas fees cheaper than rival DEXs built on the Ethereum blockchain. Furthermore, since the BNB Chain was designed for greater performance and scalability, dApps built on top of it, including PancakeSwap, inherited this property.
According to on-chain data compiled by Chainspect, BNB Chain’s network throughput is more than nine times higher, at 157 transactions per second, than Ethereum’s 17 transactions per second.
Over the years, PancakeSwap has expanded to other blockchains, including Solana, which is considered one of the most performant networks in the crypto industry. Solana’s max network throughput has been recorded to be 2,909 transactions per second.
PanCakeSwap Key Features
PancakeSwap is the best DEX on Binance Smart Chain, not only due to its reliable performance but also because of its feature-packed nature. This on-chain trading platform offers everything from trading to staking to prediction markets. Let’s go through this set of features individually and learn how to use the network.
Spot Trading
Spot trading on PancakeSwap refers to token swaps facilitated by liquidity pools in an AMM model. The biggest advantage of using PancakeSwap over a centralized exchange for spot trading is that your crypto assets are routed directly through your own wallet and always remain under your control.
The DEX is available across nine blockchains, allowing users to swap tokens on popular ones such as Ethereum, BNB Chain, Base, and Solana. So, if a certain meme coin is not available on Ethereum, you can simply change the network to Solana or BNB Chain to buy the specific token you are searching for.
One can use limit orders to automatically buy or sell tokens when the token price reaches a pre-determined level. Traders can also use time-weighted average price (TWAP) orders. These help reduce the effect of large trades on the market by breaking the order into smaller parts and spreading them out over time.
Yield Farming
Anyone can provide liquidity on PancakeSwap and earn trading fees in return. Whenever users supply liquidity, they receive a receipt token called LP tokens. Yield farming on PancakeSwap allows users to stake LP tokens in a smart contract and earn CAKE rewards.
Syrup Pools (Staking)
Since the original CAKE staking pool mechanism was retired following the implementation of the CAKE Tokenomics 3.0 upgrade, users may be wondering how to earn rewards on PancakeSwap. Enter Syrup Pools, a program that has taken up the role of rewarding passive income to CAKE holders who lock up their tokens.
Syrup Pools on PancakeSwap is a staking program where users can earn CAKE and other tokens as rewards for staking. Syrup Pools on PancakeSwap are a staking program that lets users earn rewards by locking up their tokens. Interestingly, users can stake CAKE or other supported tokens and choose which reward token they want to earn, including CAKE or other partner project tokens. However, one should always check the APR (annual percentage rate) yield before applying.
Prediction Market
The Prediction Market on PancakeSwap allows users to predict whether the price of BNB, ETH, or CAKE will rise or fall. If the crypto price movement is predicted correctly, users win the bet.
The DEX offers two separate prediction markets. On the BNB Chain, users can bet with CAKE tokens to predict the price movement of CAKE/USD and with BNB tokens to predict the price movement of BNB/USD. On ZKSyncEra, users can bet with ETH tokens on the price movement of ETH/USD.
Lottery
Lottery is a gambling game on PancakeSwap that allows users to win huge CAKE prizes. But one must buy lottery tickets, which cost $5 in CAKE tokens. Only 100 tickets can be bought at a time. A lottery ticket grants users a randomly generated number from 0 to 9. Rewards are distributed based on how many consecutive digits match from left to right. Note that the lottery is only available on the BNB Chain.
Perpetual Futures Trading
Perpetual futures trading on PancakeSwap allows users to trade special futures contracts called perpetual swaps that do not have an expiration date. Future contracts allow traders to speculate on the price of an asset without owning it.
The biggest advantage of perpetual futures trading is the use of margin, which allows traders to use borrowed funds to maximise their bets. In addition to using leverage, perpetual futures trading enables users to trade in both directions, long and short.
PancakeSwap Perpetuals Trading V1 is available on BNB Chain, Ethereum, Arbitrum, and Solana. However, PancakeSwap Perpetuals Trading V2 is available on BNB Chain, Arbitrum, Base and opBNB chains.
Initial Farm Offering (IFO)
An Initial Farm Offering program on PancakeSwap allows users to get early access to new tokens before they are officially listed. By participating, users can buy these tokens at an early stage, often at a lower price. The offering is available for a limited time, and early supporters may receive additional rewards.
To participate in PancakeSwap’s IFO, users must first create a personalised profile on PancakeSwap. This process will cost 1 CAKE, and users will receive an NFT as a receipt. Once your PancakeSwap profile is set up, you will have to lock up CAKE tokens in a CAKE Syrup Pool to get iCAKE. You can then commit CAKE tokens to buy IFO sales tokens.
NFT Marketplace
PancakeSwap lets users buy and sell NFTs that are available on the BNB Chain. If you are a creator, you can also earn a share from each trade by setting a royalty percentage on your NFTs. The DEX charges 2% platform fees from NFT sales. All sales are settled in wrapped BNB tokens (wBNB).
PancakeSwap Fees Explained
Here is a summary of the fee structure that users must keep in mind while using PancakeSwap:
- Spot trading (v2): PancakeSwap’s v2 liquidity pools apply a fixed 0.25% trading fee.
- Spot trading (v3): PancakeSwap’s v3 liquidity pools have four different fee tiers: 0.01%, 0.05%, 0.25%, and 1%.
- Perpetual futures trading: 0.02% maker fee and 0.07% taker fees.
- PancakeSwap NFT marketplace: 2% platform fees on all NFT sales conducted on its platform.
- Syrup Pool: A 2% fee applies to all flexible staking rewards. A 0.1% withdrawal fee is incurred on the unstacking amount if it is withdrawn within 72 hours of deposit.
- Lottery: To participate, users must buy lottery tickets, which cost $5 in CAKE tokens.
- Prediction market: 3% of each round’s total pot goes to the treasury.
PancakeSwap Pros and Cons
Pros: Cons:
Top Alternative to PancakeSwap
There are many alternatives to PancakeSwap across the DeFi and centralized finance world. Beginners may find PancakeSwap difficult to use and understand due to the need for crypto wallets and multiple blockchain presences. If you are one of them, try using a centralised exchange such as Bybit or Coinbase. These platforms are known for their user-friendly interface.
However, if you want to stay on-chain without overcomplicating the journey, we suggest you check out Best Wallet, a feature-rich crypto wallet that provides an easy-to-use interface while allowing you to stay on-chain.
Best Wallet
Best Wallet is a non-custodial crypto wallet that allows users to maintain complete ownership over their crypto assets throughout their on-chain journey. The wallet supports multiple networks, including Ethereum, BNB Chain and Polygon, allowing users to manage cryptocurrencies under a single platform.
This crypto wallet is an excellent option for traders and investors. The application comes with an in-built DEX aggregator called Best DEX, which connects users with the most attractive trading prices offered by liquidity pools on connected blockchains. Moreover, this mobile wallet gives users exclusive access to crypto presales through its token launchpad.
Best Wallet is free to download on Google Play and the Apple App Store. You can learn more about this feature-packed self-custodial crypto wallet in our Best Wallet Review.
PancakeSwap vs. Uniswap vs. Best Wallet Comparison
Feature/Metric
PancakeSwap
Uniswap
Best Wallet
Blockchain
BNB Chain and 9 more chains
Ethereum, L2 chains and EVM chains
60+ chains supported
Trading fees
0.25%
0.3%
No trading fees, only gas fees apply
Yield opportunities
Liquidity provision, staking, IFO
Liquidity provision, staking
Staking, token launchpad
Liquidity
High
Very high
Depends on the liquidity pools connected to its DEX aggregator
Interface
Beginners may find it difficult
Beginners may find it difficult
User-friendly
Mobile App
No mobile app
Mobile app available on Google Play and App Store
Mobile app available on Google Play and App Store
Customer support
Community channels
Community channels
Limited customer support
Best for
Token swaps, yield farming
Ethereum ecosystem, token swaps
DeFi access, non-custodial storage
CAKE Coin’s Analytics
This section will analyze CAKE to learn how the token has fared over the year. We will examine some key on-chain metrics and hear what experts have to say about the PancakeSwap project.
On-Chain Metrics Of CAKE Token
Here are interesting stats and key on-chain metrics that PancakeSwap investors will find insightful, based on data compiled by DeFiLlama and CoinMarketCap:
- PancakeSwap was the largest dApp on BNB Chain with a TVL of over $1.68 billion, at thee time of this writing.
- Its all-time cumulative DEX volume was over $1.8 trillion compared to over $2.8 trillion on Uniswap.
- Over 2 million addresses held CAKE tokens.
- Nearly 60% of CAKE’s circulating supply was held by its top 10 holding addresses.
What Do Experts Think About PancakeSwap Crypto Project?
PancakeSwap is widely recognized as one of the leading DEX in the DeFi space, particularly for users on the BNB Chain. Experts highlight PancakeSwap’s rapid growth, innovative approach and multi-chain expansion as it looks to rival established platforms like Uniswap and SushiSwap.
In a research note, crypto analytics firm Messari said,
PancakeSwap has made significant progress in establishing itself as one of the leading multi-chain decentralized exchanges. The recent launch of PancakeSwap Infinity (v4) is a key catalyst, introducing advanced features such as support for multiple pool types (CLAMM and LBAMM), modular smart contract “Hooks” for customizable trading and liquidity strategies, and comprehensive fee control for liquidity providers.
Elsewhere, crypto analyst AI chatbot aixbt highlighted PancakeSwap’s strong performance in Q1 2025, saying PancakeSwap earned the highest fees among all DEXes in the quarter. As per aixbt,
BNB chain dominance is a feature not a bug. pancakeswap’s centralized liquidity makes it a superior dex. only casual traders care about fees and decentralization.
Is PancakeSwap (CAKE) a Buy?
CAKE is among the top 100 cryptocurrencies in the world, and PancakeSwap is one of the largest decentralized exchanges in terms of trading volume. The platform continues to attract users every day who come to conduct token swaps, trade futures contracts, and participate in yield farming activity. CAKE’s all-time high stands at $44.18, hit over four years ago on April 30, 2021.
Your decision to buy CAKE ultimately depends on your investment goals, risk appetite and available capital. Always do your own research before investing in CAKE tokens and other cryptocurrencies. Remember, cryptocurrencies are risky and volatile assets. Past gains may not translate to future profits.
Where to Buy CAKE Coin?
You can buy CAKE on a decentralized or centralized exchange. Beginners are recommended to use centralized exchanges such as Binance and ByBit because these platforms have a user-friendly interface, offer easy fiat-to-crypto conversion methods, support credit card/debit card payments, and list various trading pairs.
Decentralized exchanges are best suited for intermediate and experienced crypto users who want to keep control and ownership over their crypto assets. To buy and sell tokens, you will need a crypto wallet and a DEX.
Best PancakeSwap Supported Wallets
Here are the top crypto wallets that support PancakeSwap:
If you want more options? Head to our Top 10 Best Crypto Wallets of 2025 article.
Conclusion: PancakeSwap Review
PancakeSwap is an important crypto application that helped decentralized exchange become as popular as it is today. Over the years, PancakeSwap has consistently upgraded its offering and added new features in a bid to offer the best on-chain experience to its users. Today, PancakeSwap is more than a DEX. It is a complete DeFi platform where users can swap tokens, trade futures, stake cryptos, participate in yield farming and even entertain themselves with lottery games.
See Also:
- What is Brett (BRETT) Meme Coin: A Beginner’s Guide
- Arbitrum Staking: How & Where to Stake ARB
- What is Metaverse: A Beginner’s Guide
- Top 5 Cryptos That Can Survive Quantum Computing
- What is Kaspa (KAS): A Beginner’s Guide
- What is Aptos (APT): A Beginner’s Guide
- What is Cosmos (ATOM): A Beginner’s Guide
References
- “PancakeSwap Voting Proposal: CAKE Tokenomics v2.5.” PancakeSwap, https://pancakeswap.finance/voting/proposal/0x3e014aab40f6551da9f76da0e62e44e9ece55c4997f220057bf3e42dc8307c2f
- “CAKE Tokenomics.” PancakeSwap, https://docs.pancakeswap.finance/protocol/cake-tokenomics
- “Voting.” PancakeSwap, https://docs.pancakeswap.finance/protocol/voting
- “Initial Farm Offerings (IFO).” PancakeSwap, https://pancakeswap.finance/ifo#ifo-how-to
- “PancakeSwap.” DeFiLlama, https://defillama.com/protocol/pancakeswap?tvl=false&dexVolume=true&groupBy=cumulative
- “PancakeSwap (CAKE) Price, Charts, and News.” CoinMarketCap, https://coinmarketcap.com/currencies/pancakeswap/#Analytics
FAQs
What is PancakeSwap used for?
PancakeSwap is mainly used for token swaps across various blockchains, including BNB Chain, Solana and Ethereum.
What is the best slippage tolerance for PancakeSwap?
The slippage tolerance on Pancakeswap is between 0.5% and 1%.
What is PancakeSwap yield farming?
Yield farming on PancakeSwap refers to staking LP tokens to earn CAKE rewards.
What are PancakeSwap v2 and v3?
PancakeSwap v2 and v3 are different versions of the PancakeSwap DEX. v3 is the latest version, and it offers liquidity and capital efficiency improvements.
What is claim bounty in PancakeSwap?
The bug bounty program conducted by PancakeSwap rewards individuals who identify vulnerabilities in its smart contracts and code.
What are the fees on PancakeSwap?
PancakeSwap’s v2 liquidity pools apply a fixed 0.25% trading fee. Meanwhile, PancakeSwap’s v3 liquidity pools have four fee tiers: 0.01%, 0.05%, 0.25%, and 1%.
Which blockchain PancakeSwap is built on?
PancakeSwap was originally built on BNB Chain. It has expanded to Ethereum, Solana and Base in recent years.
Can I stake CAKE tokens on PancakeSwap?
Yes, you can stake CAKE tokens on PancakeSwap’s Syrup pools to earn token rewards.
How do you trade on PancakeSwap?
It’s easy to trade on PancakeSwap. All you have to do is connect your crypto wallet and choose the tokens you want to swap. Enter the amount, review the details, and confirm the transaction.
Is PancakeSwap better than centralized exchanges?
The biggest advantage of PancakeSwap over centralized exchanges is that the former allows users to retain 100% control and ownership of their assets.
How do I add liquidity to PancakeSwap?
You can add liquidity to PancakeSwap by selecting a liquidity pool and depositing two tokens of equal dollar value into it, such as BNB-CAKE.
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