Business Benefits of launching DeFi Protocol like PancakeSwap
PancakeSwap is one of the famous DeFi based Protocol which aims to provide Automated Market Making (AMM) by being a #1 liquidity provider. This open-source DeFi based exchange is built on the Binance Smart Chain (BSC) through which the platform users can swap BEP-20 tokens.
CAKE is the native token of PancakeSwap and the users can swap, add liquidity, farm, yield, stake, and win CAKE Tokens through lottery.
How Does PancakeSwap Work?
Automated Market Maker
An Automated Market Maker is a decentralized exchange protocol that doesn't need an order book but relies on the mathematical formula to set the price for the assets. The price of the assets is fixed according to the pricing algorithms. This pricing formula can vary according to the DEX protocols.As PancakeSwap works on the AMM model, which means the users can trade their digital assets on the platform at any time even if their order book isn't matched with anyone else.
Instead, the trading occurs against liquidity pools.
These liquidity pools are filled with user's funds. The users deposit those funds into the pools just to receive a liquidity provider token or LP Token in return. These LP tokens can be used to reclaim shares and trading fees.So, in short, anyone can trade BEP-20 tokens or add liquidity to PancakeSwap and earn LP tokens as rewards.
Many Business people out there are willing to kick start their own DeFi based Exchange like Pancakeswap, With Pancakeswap Clone Script, one can kick start their own DeFi Exchange instantly and easily.
