Binance vs PancakeSwap l Which is the Better Crypto Exchange 2022?
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In this guide, we will take a look at Binance vs PancakeSwap to help you select a perfect crypto exchange.
Introduction: Binance vs PancakeSwap
Before we go through Binance vs PancakeSwap comparison, let's understand a bit about Binance and PanckakeSwap.
What is Binance?
Founded in 2017 by Changpeng Zhao, Binance is one of the world’s biggest crypto exchanges in terms of the trading volume. With a trading volume of $7.6 billion, it facilitates more than 1.4 million transactions per second. Based and Headquartered in the Cayman Islands, Mahé, Seychelles, it allows buying, selling, and trading cryptocurrency exchange. Binance provides an online wallet for users to store their digital assets. Binance witnessed a setback when 7,000 bitcoins worth $40 million were stolen in a large-scale security breach. It started its operation in Hong Kong but due to a ban on cryptocurrency in China, it moved its headquarters to the Cayman Islands.
BNB (Binance Coin)
Based on ERC 20 standard, BNB (Binance Coin) is Binance’s native token used for trading cryptocurrencies and paying fees. Launched with an initial coin offering (ICO) in July 2017, BNB was initially based on the Ethereum blockchain, before Binance launched its own blockchain. With a maximum supply of 200 million BNB tokens, there are 169,432,937 tokens in circulation.
What is PancakeSwap?
PancakeSwap is a decentralized exchange (DEX) and yield farm, built on the Binance Smart Chain (BNB Chain). Like UniSwap (UNI) and SushiSwap (SUSHI), it allows users to swap their coins for other coins without any involvement of the middleman. PancakeSwap works on BEP20 tokens, which are developed by Binance. Being one of the most popular decentralized platforms it claims to have a user base of 2.8 million. It supports 1,426 token pairs to trade on the DEX. Its trading volume stood at $1 billion in early 2021.
Using an automated market maker (AMM) model, PancakeSwap allows its users to swap between cryptocurrency assets by tapping into the user-generated liquidity pool. CAKE is the native utility token of PancakeSwap.
It is used for yield farming, staking, and participating in the PancakeSwap Lottery. Its community governance portal allows voting on governance proposals.
Yield Farming
It is a process to generate income on PancakeSwap. Yield Farming in Farms is a great way to earn CAKE rewards on PancakeSwap. Yield Farms allow users to earn CAKE while supporting PancakeSwap by staking LP Tokens. Farms accept only their own LP Token. A CAKE-BNB Farm will only accept CAKE-BNB LP Tokens.
Users need to provide liquidity to the trading pair to get the exact LP Token. For example, they have to provide liquidity for the CAKE-BNB pair to get CAKE-BNB LP Tokens. There is also an opportunity to earn income through a lottery on PancakeSwap.
Features: Binance vs PancakeSwap
Take into account the following features of Binance before selecting it as your preferred crypto exchange:
Swap Farming
Binance provides a feature of Swap Farming to users to earn profit by swapping their pair cryptocurrencies using an automated market maker (AMM) model. Its liquidity pool feature enables the users to access deposits or swap crypto pairs.
Margin & Leverage Trading
With Binance experienced traders can trade cryptocurrencies by borrowing digital assets to generate profits. They can leverage up to 20 times their assets to increase investment.
Staking Options
It provides an option called Binance Earn to stake their crypto assets to make passive income. With flexible staking, they can buy and sell tokens for the period they wish.
Below are the features of PancakeSwap:
Staking on PancakeSwap
You can increase your earnings by staking your CAKE token on the PanckeSwap’s Syrup pools through the below steps:
Your earnings will depend on the pool you have chosen.
PancakeSwap Lottery
PancakeSwap allows its users to earn passive income through “Lottery”. In this, users need to guess the 4-digit combination of numbers between 1 and 14 such as 4-6-8-12 to win.
Trading: Binance vs PancakeSwap
Trading on Pancakeswap
To start earning you need to create a wallet on PancakeSwap that is compatible with the BNB Chain such as BNB Chain Wallet, Trust Wallet, MetaMask, and Coinbase Wallet. After creating a wallet with any of your choices, you need to connect with BNB Chain to start interacting with PancakeSwap. You can connect the wallet to PancakeSwap through the following process to add liquidity to one of the pools on the platform:
You can deposit and hold LP tokens on a Farm to earn CAKE tokens and interest on them.
Start farming on PancakeSwap through the below steps:
Trading on Binance
Binance trades in over 600 cryptocurrencies globally and allows trading in 100 digital currencies in the U.S.
You need to create an account to start trading on the Binance exchange through the below steps:
After completing KYC verification of your Binance account, you can start trading cryptocurrencies of your choice under the Spot Trading option.
Summing Up
While Binance is the world’s largest cryptocurrency exchange with unique trading and investing features such as margin and leverage trading, PancakeSwap is a decentralized exchange that allows its user to earn passive income through farming, staking, and lottery. Depending on your investment objective you can choose the best crypto exchange for yourself. Learn more about how to invest in Binance and other crypto exchanges to make sure your crypto investment grows phenomenally.
