PancakeSwap (CAKE), a Binance Smart Chain-based decentralized exchange (DEX), is up 28 percent in the last 24 hours. This comes after PancakeSwap announced a collaboration with Binance, the world’s largest cryptocurrency exchange.
Prior to the announcement, the token was trading around $5.50 and had risen to $7.00. The token was trading at around $6.40 at the time of publication.
According to the press release, the partnership launches a ‘PancakeSwap Mini-Program’ on the Binance app, which is the first decentralized finance (DeFi) project on Binance’s mobile platform. The Mini Program will begin rolling out on Thursday and will eventually be available to all app users.
The goal of the launch is to provide Binance users with easy access to PancakeSwap via the Binance app, lowering the barrier to DeFi. Binance has also announced a DeFi Wallet within its app, which will allow users to transfer funds and use DApps like PancakeSwap.
CAKE is up 28 percent on the day, but it is still 85 percent off its all-time high, which was set in April 2021. According to Nansen data, on-chain volume is still small in comparison to 2021.
What is Pancakeswap (CAKE) and How does it Work?
PancakeSwap employs an Automated Market Maker (AMM) design, which means it does not use an order book system (a feature of centralized exchanges) to match traders.
In an AMM model, clients exchange against a liquidity pool comprised of assets contributed by different clients. At the point when client stores upheld crypto tokens into liquidity pools, they are compensated with liquidity supplier (LP) tokens, which address their portion of that particular liquidity pool.
These LP tokens can be utilized to recover their portion as well as acquire exchanging expenses on exchanges that others demand.
Whenever clients add tokens in explicit sets, like BUSD-BNB, USDT-BUSD, CAKE-BNB, and others, LP tokens are produced. CAKE is a BEP-20 token on the BNB chain that boosts PancakeSwap liquidity arrangement.
Whenever a client stores BUSD and BNB crypto tokens into the BUSD-BNB pool, they are compensated with BUSD-BNB LP tokens. Clients are compensated in CAKE when they secure their saved tokens.
