2021 was the year we saw different crypto projects spring up from nowhere. We came to learn about NFTs, blockchain gaming, and most importantly, Decentralized Finance, or DeFi.
And one of the most popular DeFi projects in 2021 is PancakeSwap, a decentralized exchange built on the Binance Smart Chain. PancakeSwap basically allows users to trade or swap their crypto into another type of crypto in a process called liquidity mining.
Liquidity providers then get rewarded for contributing these assets to the pool, making PancakeSwap one of the most popular passive income projects in cryptocurrency in 2021.
I’ve been seeing this thing for a couple of times in TikTok and YouTube, but I never really understood it back then. I wasn’t serious with creating passive income from crypto, so I dismissed the videos from people making $1K per month to as high as $5K per month from PancakeSwap.
It was only around the 3rd quarter of 2021 that I started looking into these crypto passive income projects, and I decided to invest in PancakeSwap in November.
I was supposed to make a 1 month result video in December, but I got so slammed with different projects and holiday outings, that I couldn’t do it. So here I am showing you what my results were with PancakeSwap after trying it for 3 months.
What is PancakeSwap?
As mentioned earlier, PancakeSwap is a decentralized exchange on the Binance Smart Chain. It allows its users to trade Binance Coin (BNB) and a variety of other BEP-20 tokens. Due to its massive amount of variety and features, the platform saw exponential growth last year, making it the biggest Automated Market Maker based in the BSC network, even eclipsing Binance’s own DEX.
CAKE is PancakeSwap’s native token, and as of today, it has a circulating supply of 260 million CAKE. Since their supply is not hard-capped, or theoretically, unlimited, the PancakeSwap team is always looking into burning their tokens to make deflation higher than emission. In simpler terms, the value of the token will keep going down since the token’s supply is unlimited.
PancakeSwap was founded in late 2020 by a group of anonymous developers supported by Binance. I know this could be a red flag right away to some people, but that doesn’t count the platform automatically as a scam. Plus, the platform has been audited by the cybersecurity firm CertiK in 2020.
What are the Features of PancakeSwap
PancakeSwap offers a variety of features to help users utilize and profit from the platform.
- Exchange – swap your tokens for other tokens without have to go through a centralized exchange.
- Yield Farming – provide liquidity to the exchange, and in return, you get LP tokens that will earn you rewards.
- Syrup Pools – you can stake CAKE and other tokens here and get rewarded the same tokens.
- Lottery – pick 6 numbers, and get rewarded from a predetermined prize pool when your numbers are picked.
- Prediction – a simple prediction market where you predict the price of BNB/USDT at the end of 5 minutes.
- NFT Market – you can have your NFT collections get listed here and sold using BNB as the token for each transaction
- Initial Farm Offerings (IFO) – you can buy new tokens here launching on the Binance Smart Chain by staking CAKE in the IFO pool
- Voting – the community can affect change in the PancakeSwap community by voting on proposals made by the team or the community.
My Results
I’ve seen people making a lot of money from PancakeSwap’s Farms and Syrup Pools in 2021, so I decided to give it a shot. Since this was the first time I did it, I had to go through hoops to invest in the platform.
I invested $223 in PancakeSwap on November 18. Throughout the entire process, I paid around $6 worth of fees — $5 to move from KuCoin to MetaMask, and $1.12 to enable AutoCake and start staking.
After 11 weeks, or close to 3 months, in PancakeSwap, my $223 fell to $130 — a 41.7% decrease in value.
It’s a significant drop and it’s something that I wasn’t expecting at all when I got in. The biggest factor to this decline is because of CAKE’s price drop. I bought CAKE at $15, and at the time of this writing, it dropped to $8.
The first month of 2022 was not kind to a lot of projects, so it is a disappointing circumstance to be in.
The Pros & Cons of PancakeSwap
PROS
- Low fees
- Variety of services and products
CONS
- Not beginner-friendly process
- Inflationary token
Because of my results, I’ve decided to withdraw all my investment from PancakeSwap. I know it hasn’t been long and there may be some people who’s going to say that I should not have pulled out, and wait till the market recovers.
But my thinking right now is to use that money for something else that is maybe safer in nature, such as stablecoins and network tokens like ETH, SOL and AVAX.
There are a ton of projects out there, but right now, I can’t see myself taking too much risk with DeFi projects. So I’m limiting myself for now to a couple and play on the safe side.
Cryptocurrency is still an exciting space and I keep having regrets that there are so many projects that come out, and I want to get in on them, but I don’t have the funds to start with. I’m just going to keep my eye out for select projects and really take the time to research them.
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