Welcome to the definitive guide on how to use PancakeSwap. A lot of you have asked me recently, both here and on YouTube, to put together a comprehensive guide on how to use PancakeSwap. So, it’s time to sit down and put this together. I will make this guide as easy as possible and I will provide you the easiest way on how to use PancakeSwap, in good old Crypto Made Easy fashion. Let’s dive right in.
Before we get started with the guide, let’s first talk about what PancakeSwap is and why I think PancakeSwap is better than UniSwap. As always, you find a table of content, so feel free to skip ahead.
Table of Contents
- What is PancakeSwap?
- How to use PancakeSwap
- How to find Tokens on PancakeSwap
- How to trade on PancakeSwap
- How to use PancakeSwap Lottery
- How to stake CAKE on PancakeSwap
- PancakeSwap Farming
- PancakeSwap NFT’s
- PancakeSwap Initial Farm Offering
- PancakeSwap Roadmap
- The Best Way to Stay Up-to-Date with my Content
What is PancakeSwap?
PancakeSwap is a decentralized exchange (DEX) that utilizes the Binance Smart Chain (BSC). It is a rather new exchange that was launched in September 2020. PancakeSwap is an Automated Market Maker (AMM) because it runs entirely by algorithms.
Also, PancakeSwap has its own token, CAKE, which I have covered in this guide on how to buy CAKE on Binance. I personally hold some CAKE for the long term as I believe in the project and in the Binance Smart Chain.
Now, if you never have heard of AMM’s before, Binance does a way better job of explaining what AMM’s are than I ever could. So I highly recommend reading their article if you are interested in learning more.
You can think of it as an exchange that allows its users to trade their assets for liquidity pools and receive some yields for that. That way you as a user could loan out your assets to those liquidity pools and receive some liquidity tokens for that, which you could later stake to earn even more in interest. A very interesting concept.
So there are a lot of things you can do on PancakeSwap. The thing most of you probably will want to do is to swap BEP-20 based tokens. But there is a lot more, you can also earn CAKE, as mentioned above, by utilizing their Yield Farms, Staking, and Syrup Pools (more later). You can also win some CAKE by participating in their Lottery.
The Binance Smart Chain
You may wonder why they utilize the Binance Smart Chain rather than something like ERC20. The answer is very simple: cost.
If you have paid any attention to the extremely high Ethereum gas fees, it makes total sense to move away from that. Just an example, I have bought some EGLD a couple of days ago using UniSwap. My plan was to invest 100$ in EGLD, but I had to pay 29$(!) in Ethereum fees.
I am not interested at all in anything like that. Using the Binance Smart Chain not only reduces those fees to a minimum. I have barely paid more than ~0,10$ for a trade using the Binance Smart Chain.
So, to summarize why I prefer to use BSC over ERC20: It’s way faster, it’s way cheaper and I can use Binance to manage my assets. That’s all I need to know.
How to use PancakeSwap
For the sake of this tutorial, I will create a scenario that I found to be the easiest way to use PancakeSwap. In this example, we will buy some BNB on Binance, transfer them to our MetaMask wallet and buy CAKE on PancakeSwap using our BNB. Simple as that.
Now, if you just want to buy CAKE, there is a much easier way, which I have covered before here, but this same method can be applied to any token that is sold on PancakeSwap! So you can follow this guide no matter which toke you want to buy.
I plan on buying some PancakeSwap (CAKE) anyway to stake it, so we go with CAKE for now. I’ll provide each of the steps required below in detail, after following this tutorial you know exactly how to use PancakeSwap and you will comfortably navigate through your trades!
Step 1 – Sign up for Binance
As most of you know, Binance is my favorite exchange because of its history of security and ease of use. If you don’t have an account yet, use this link if you like to receive discounted trading fees on all of your trades while at the same time helping out my blog.
Binance’s onboarding is pretty straight-forward. Just go through their sign-up process and put in the data you get asked for. Don’t forget to enable 2-Factor Authentication for extra security. I like using Google Authenticator. Avoid SMS.
Step 2 – Buy BNB on Binance
Next, we need to buy BNB on Binance. That is as simple as signing up. Once you are all onboarded and logged in, select Buy Crypto -> Credit / Debit Card from the top navigation menu.
We are in luck because we can directly buy BNB using our Credit Card on Binance, no need to go through complicated trades.
If you want to learn how to use PancakeSwap, this is just part of the process. But if you did it once, you know it. Once you are there, follow the sub-steps below.
1 – Change Coin to BNB
2 – Enter amount of USD you want to deposit
3 – Check amount of BNB you’ll receive
4 – Click Buy BNB to seal the deal
Now you might get asked to verify yourself if that wasn’t already done during onboarding, and you need to enter your Credit Card details obviously.
Step 3 – Installing MetaMask
MetaMask is one of the easiest and most popular wallets you can use for something like PancakeSwap. The setup is really easy and it actually comes as a browser extension for both Chrome and Firefox.
You can also choose to download MetaMask as an app on your iOS or Android device, in this tutorial we are going to use the Chrome extension
To use MetaMask with PancakeSwap you first need to go to the MetaMask website and click on Download now.
Once you click on Download Now, the website usually detects your browser, in case it doesn’t, just make sure you either choose Firefox or Chrome and then simply click on Install MetaMask for …..
Click on Add to Chrome once you end up in the Chrome web store.
Next, click on Get Started once the MetaMask setup starts in your browser. Click on Create a Wallet to set up a new wallet.
Choose if you want to help improve MetaMask by sending anonymized usage data, or don’t.
Next, create a new password and make absolutely sure it’s secure. You can use my own Secure Password Generator to create a safe password if you like. I recommend using at least 14 characters and include all kinds of special characters in it. Also, make absolutely sure you store it OFFLINE or in a Password Manager like KeePass. I discourage you from using Online Password Storages of any kind.
Now the most important part. The Secret Backup Phrase.
Click on the “Click here to reveal secret words” field to reveal your secret words. DO NOT LOSE THEM! Without them, you won’t be able to recover your wallet. I recommend writing them down on a physical piece of paper, make a few copies, and store them in a couple of different locations.
After that confirm your Secret Backup Phrase by choosing the words in the right order. Finally click on All Done.
You might wonder why you don’t need to setup an Email to register for MetaMask. That is because your wallet is stored on the Blockchain. And that is also why you need your recovery phrase, this allows you to find your wallet and unlock it later on.
You are now done with setting up your MetaMask Wallet.
Click on the little METAMASK logo in the upper left corner to show your wallet.
And that’s it! You can access your MetaMask wallet simply by clicking on the Extensions Tab in the upper-right corner of your browser and open it by typing in your password (not your recovery seed!).
Now we can move on and I will show you how to use PancakeSwap with MetaMask!
Step 4 – Add BNB Network to MetaMask
Now we need to transfer BNB to MetaMask. Therefore, we need to add the Binance Smart Chain Network to our MetaMask. Don’t worry, it’s super simple!
Open your MetaMask and unlock it with your password. Click on your profile picture and select settings.
Good. Once in settings, click Networks -> Add Network and enter the details as I have them below. Now before doing this, double-check for the correct settings on the official Binance Website. I don’t think they would ever change them, but better be safe than sorry!
Network Name: Binance Smart Chain
New RPC URL: https://bsc-dataseed.binance.org/
Currency Symbol: BNB
Block Explorer URL: https://bscscan.com
Step 5 – Transfer BNB to MetaMask
Now we are going to transfer BNB from Binance to MetaMask. Make sure your MetaMask is unlocked and you are on the Binance Smart Chain Network. That should be indicated by your current balance of 0 BNB.
Click on your Account1 to copy your BNB wallet address.
Now go back to Binance, click on Wallet -> Fiat and Spot.
If you don’t own any other currencies, BNB should show up on top. If it doesn’t, search for BNB in the search bar. Then click on Withdraw next to BNB.
Now paste your MetaMask BNB address into the recipient field, select Binance Smart Chain (BSC) as the transport protocol and enter the amount you want to send. I HIGHLY recommend sending the minimum amount of 0.01BNB first to see if it arrives on your MetaMask.
Never send large amounts of crypto anywhere before testing it first with a small amount! Be aware of the fees, they are super low compared to ERC20 (Ethereum).
Once you tripple-check everything, hit Submit and enter your 2-Factor Authentication and Email Code.
Now grab a coffee or talk a brisk walk, the transaction usually only takes a couple of seconds to a couple of minutes (It took about 2 minutes for me). Open your MetaMask and press F5 on your keyboard to update the site.
As soon as the BNB has arrived, you can go ahead and send the full amount you wish to trade on PancakeSwap. And now, I’m going to show you how to use PancakeSwap with MetaMask!
Step 6 – How to use PancakeSwap with BNB
First, you need to open PancakeSwap. Then click on Connect in the upper-right corner to connect MetaMask to PancakeSwap.
Once you click on MetaMask, you get prompted to select which account you want to connect to, if you have followed through this tutorial, your BNB account should be connected per default. Click on Next and then on Connect. Your MetaMask wallet is now connected to PancakeSwap.
This is basically all there is to the initial setup. Now you can choose what you want to do with your BNB.
How to find Tokens on PancakeSwap
I want to provide you with a little trick on how to find Tokens on PancakeSwap in a more efficient way than using their interface. Not that anything is wrong with that, but I like the way I found better because it gives me a better overview with the chance of checking prices on the fly.
Head over to CoinMarketCap and type PancakeSwap on the search bar in the upper right corner. Then select PancakeSwap underneath of Exchanges. This is a trick you can use for all kinds of exchanges by the way.
That way, you see all coins listed on PancakeSwap with their prices right next to them.
How to trade on PancakeSwap
Now that your wallet is connected, you are able to trade on PancakeSwap using BNB.
On the menu, click on Trade -> Exchange.
Since we want to buy some CAKE to stake it, we simply choose CAKE as our desired currency.
Once you are in the Swap window, go ahead and select the coin that you want, in our case, CAKE, and then enter the amount of BNB you want to spend for it. Finally hit Swap to seal the deal.
And this is how we can buy CAKE on PancakeSwap. This exact procedure is applicable to any other coin available on PancakeSwap.
If you click on Swap and hover over the fees, you can see that the fees are as low as 0.2%, which is absolutely great!
Once you click on Confirm Swap, MetaMask asks you one final time to confirm your transaction and once you do that, you are done.
The next thing you probably going to ask is, how can I see my tokens on MetaMask? I got you covered.
How add BEP-20 Token to MetaMask
There is Etherscan.io for the Ethereum Blockchain and there is BscScan for the Binance Smart Chain. It’s really easy to add custom tokens to your MetaMask!
Go to the BscScan website and search for the token you want to add. You can recognize verified tokens by the blue checkmark.
Once you are there, click on the three small dots next to Profile Summary and click on Add Token to Web3 Wallet.
MetaMask will open and asks you if you want to add the token. It also shows you your balance!
And once you have added that, you can open up MetaMask and click on CAKE to check your balance. Quite easy, right?
I think now you should know the basics on how to use PancakeSwap. If that is all you want, you are all set. If you want to learn more about their other features like staking, participating in their lottery, etc, keep reading.
How to use PancakeSwap Lottery
This is one reason why I love PancakeSwap. This is such a fun thing to do! PancakeSwap offers an internal lottery where you participate by spending CAKE with the chances of winning CAKE.
There are lottery drawings every single day. Just to give you an example: Yesterday’s draw was worth 1496 CAKE, which as of the current price of 17$/CAKE is 25.000$. Mind-boggling.
PancakeSwap Lottery Conditions
A few key points for you to get started.
- You can buy a lottery ticket for 1 CAKE.
- There is no single user limit, so you can buy as many tickets as you want
- Once you buy a ticket, you get a random 4 digit number that could be your winning number
- To win, you need to match all 4 numbers, in the same order, as your ticket
This is the gist of it, you can read more details here.
How to participate in the PancakeSwap Lottery
Navigate to Lottery, click on Approve CAKE. MetaMask will ask you if you trust PancakeSwap with your CAKE.
Once you click on Confirm, you have to click on Buy ticket and Confirm that your CAKE will be spent for the lottery ticket. After confirming, you’ll get your number! Good luck!
How to stake CAKE on PancakeSwap
That’s probably the reason a lot of you are interested in PancakeSwap. Staking is a great way to earn passive income. To be able to stake CAKE, you actually need to have some CAKE and BNB available in your wallet, which you now know how to do thanks to the steps above.
The great thing about staking on PancakeSwap is, that you can un-stake your tokens at any time, so there is no locking period. I personally don’t like the idea of my funds being locked due to market volatility, so that is great.
UPDATE: Auto Compounding available from Mai 2021
The staking method that I show you in the step below is the “old” manual staking method. It still works as described, although it is way more convenient to use their new Auto Compounding feature that they have just implemented in Mai 2021. I recommend you watch my video to understand how it works.
You can however, if you want to do so, still use the manual method described below. I would recommend using the new method if you wish to farm CAKE. The video explains it well.
Selecting a Staking Pool on PancakeSwap
Navigate to Pools from the left navigation bar. Now you can choose which kind of Pool you want to choose, which means choosing a currency you want to earn by staking your CAKE.
I want to earn MORE CAKE, I mean, who doesn’t? So I choose the CAKE Pool. I’m getting really hungry writing this article, by the way.
Once you click on Approve CAKE, MetaMask asks you for your permission, same as with the lottery before. Once you have that confirmed, click on the + and choose how much CAKE you want to stake.
Enter an amount of CAKE you want to stake and acknowledge the small fee for it. Then you will see your CAKE Pool updated. That’s how easy it is to stake CAKE on PancakeSwap!
Harvest or Compound?
Now, once you have actually earned some CAKE, you can choose to harvest it (cash it out) or to compound it (re-invest it).
So for example, if you have earned 1 CAKE and you click on harvest, that CAKE will be put into your MetaMask wallet, made available to you.
If you choose to compound, on the other hand, that one CAKE would go right back into the staking pool on top of your other CAKE, generating even more CAKE because you now have more CAKE staked. Simple enough?
PancakeSwap Yield Farming is a very attractive way on earning passive income with a very high APR (Annual Percentage Rate). Be very aware that this can be subject to impermanent loss due to high market volatility, so this can be a high-risk endeavor. Make sure to do your own research on the topic before using PancakeSwap farming!
Step 1 – Adding liquidity
First, we need to add liquidity to our PancakeSwap exchange.
On the navigation bar choose Farms.
Next, it’s up to you to select a farming pair. For the sake of this tutorial, we stick with CAKE-BNB. Click on it to expand it.
Now click on Get CAKE-BNB LP to add liquidity to the pool.
Once you are there, choose how much BNB you want to add to the pool. Click on Approve CAKE once you are satisfied. Confirm the dialogue in MetaMask and acknowledge the fee.
Now click on Supply to confirm your adding of liquidity.
You should see the amount of available LP tokens in your wallet now.
Step 2 – Enable PancakeSwap Farm
Now back to Farms from the navigation bar and expand your CAKE-BNB. Click on Enable to enable the Farm. MetaMask will ask you again to confirm the process. Once done, click on Stake LP to get started.
Enter the amount you want to stake and click Confirm. And that is it, this is how to use PancakeSwap Farming! Same as with regular staking, you can go ahead and Harvest your gains at any time!
PancakeSwap also started offering Non-Fungible Tokens (NFT). Those PancakeSwap NFT’s can only be one by registering for a new drop once they announce it.
You can check that by clicking on Collectibles on the navigation bar. As of now, there is no way to participate. But once you do win one, you can choose to keep it or to trade it for CAKE.
Due to the recent NFT hype, it’s probably a good idea to keep them as a long-term investment, especially if PancakeSwap takes off, they might be worth a lot at some point, also, they look very cool!
PancakeSwap Initial Farm Offering
But hold on, we are not done yet. There is more!
You probably have heard about ICO’s when it comes to cryptocurrencies (Initial Coin Offerings), which allows you to get into a new currency really early.
By using PancakeSwap Initial Farm Offering, you get the chance to participate in a newly released Farm with potentially great rewards. You can check out PancakeSwap Initial Farm Offering by choosing the IFO tab on the menu.
I have been following the PancakeSwap project over the past couple of months and if you look at their Roadmap, you can see that they got a lot of things done!
The next things on their roadmap as of April 2021 are:
- Lending & Borrowing of BSC and LP tokens
- Margin Trading
- NFT-Based Gamification (Tasks, Level Ups, Earn NFT’s, minting with CAKE)
- Binary Options
- Fixed-term Staking
All of which are great features that would further improve the PancakeSwap platform.
If you have made it until here, I hope it got clear that I am personally very excited about PancakeSwap. There is just a lot of things you can do on there right now, even the platform is not that old.
From an UI/UX standpoint I also like the gamification they did. I am a (part-time) Web Developer myself and I appreciate a good experience when I see one, and PancakeSwap definitely nailed that part.
I also like the ease of use. Once you have your MetaMask connected, it’s really easy to use all available features like staking and trading, or swapping tokens.
As long as UniSwap doesn’t solve the gas fee problem, I don’t see myself using it anytime soon. I hope more developers will make the switch to the Binance Smart Chain as I believe low fees and fast transaction speeds are the future in this space.
We can just be excited about the things to come and I hope to see a lot more smaller-cap altcoins popping up on PancakeSwap very soon!