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As Ethereum’s transaction fees continue to get more expensive, investors are looking for more profitable alternatives. To transact on Decentralized Exchanges (DEX) built on the Ethereum network, you will need to spend up to $ 100 in transaction fees (gas). These gas costs fluctuate with the use of the network and can sometimes reach several hundred dollars.

Fortunately, other blockchains have more profitable transaction structures, such as Binance Smart Chain. While there are tradeoffs when it comes to decentralization and security, Binance Smart Chain allows users to transact on its blockchain for less than a dollar. The main exchange based on Binance Smart Chain is PancakeSwap, and retail investors use it as a cheaper DEX alternative to Uniswap on Ethereum.

These inexpensive fees are largely due to Binance Smart Chain’s consensus proof-of-stake model. Learn how to buy PancakeSwap (CAKE) now.

What is PancakeSwap?

PancakeSwap is a leader in the decentralized finance (DeFi) industry. DeFi replaces the need for financial intermediaries like lenders, stock exchanges, insurance companies and even investment funds. These intermediaries can be replaced by smart contracts: code downloaded into the blockchain to carry out financial transactions.

While most of the DeFi industry is built on the Ethereum network, more developers are choosing alternative blockchains, such as BSC, due to the significantly lower transaction and development costs.

PancakeSwap is the leading DEX on Binance Smart Chain. The platform allows investors to trade cryptocurrencies through smart contracts, so there is no need to trust a third party to have custody of your funds. In addition, trading on a DEX is anonymous, as you only need to connect your cryptocurrency wallet to trade the crypto – there is no need to create an account with the DEX.

Because PancakeSwap is decentralized, it cannot provide its own liquidity for investors to buy and sell cryptos. Instead, investors can stake their cryptocurrencies into smart contracts to earn passive income through the exchange’s transaction fees.

Brief History of PancakeSwap

The founders of PancakeSwap are anonymous, which may be of concern to some investors. However, the DEX code has been audited and it is probably safe to use. CAKE, the native token on PancakeSwap, started trading when DEX launched in September 2020. At the time, the token was trading below $ 1. As of December 2021, CAKE is trading at around $ 12 per token.

PancakeSwap is a fork, or a copy, of Uniswap. Uniswap is the leading DEX on Ethereum’s network, and the platform trades more volume on its network than Bitcoin’s network. However, PancakeSwap has some advantages over Uniswap. Namely, the fees on Binance Smart Chain are less than 1% of the fees on Uniswap, which makes it viable to use with small amounts of capital.

PancakeSwap also offers CAKE tokens to liquidity providers to entice investors to stake their crypto for interest. These rewards can be sold at market price or you can use them to participate in PancakeSwap lotteries.

Step 1: Open an account online.

To purchase CAKE tokens, you will need to create an account with Binance. Binance is the world’s largest cryptocurrency exchange, but some functionality is limited if you are located in the United States. To comply with the Securities and Exchange Commission (SEC) Know Your Consumer (KYC) regulations, you will need to verify identity to start trading.

If your computer’s IP address is outside of the United States, you can go to Binance’s full website. The best way to fund your account is with cryptocurrency. The best exchanges that allow you to easily log into your bank are Coinbase, Gemini, and Kraken.

Step 2: Buy or download a wallet.

No matter what cryptocurrency you invest in, you shouldn’t keep your funds on the exchange. Cryptocurrency exchanges are big targets for hackers, and several platforms have been hacked in the past. Since the centralized exchanges hold the custody of investor funds, if there is a breach of security, these funds can be stolen.

Hardware wallets are the most secure way to store cryptocurrency. These wallets store crypto on physical devices offline, making it impossible to access online. If you are looking for a free alternative to store your crypto safely, you should consider using a software wallet.