Did you invest only $ 1,000 in CrepeSwap (CRYPTO: CAKE) tokens last October, you would be sitting on over $ 20,000 in profit today. It hasn’t even been a year since its launch, but the decentralized exchange of the same name behind the token is now seeing $ 1 billion per day in cryptocurrency trading volume. It has over $ 12 billion in total assets on its platform.
So how did PancakeSwap go from zero to hero in such a short time? Ultimately, this solves a fairly major problem in the cryptocurrency community – access to altcoins for Americans.
A single solution for a single country
American and Chinese investors have a lot in common when it comes to cryptocurrencies. For years, Chinese entrepreneurs and millionaires have used Bitcoin to transfer their hard-earned wealth abroad while circumventing strict central government regulations on capital controls. Likewise, Uncle Sam has a unique set of financial regulations that require cryptocurrency exchanges like Binance, the largest of its kind in the world, to have a separate platform for Americans and one for all. others. There are only around 50 coins available for trading on Binance.us, but Binance.com offers over 500 coins. According to Investopedia, Binance recently halted trading on its US platform, citing regulatory concerns.
As a result, the only way for U.S. investors to legally access the vast depth of the altcoin market is through decentralized exchanges like PancakeSwap, hence its sudden rise in popularity. There are 1,639 coins listed on PancakeSwap and 9,654 pairs available for trading, far more than what Binance.com offers.
The platform does not offer any fiat-to-crypto service to comply with the regulations. Instead, investors must first buy major cryptocurrencies like Bitcoin and Ethereum somewhere, then connect their wallet to the PancakeSwap network to trade for altcoins. But here’s the great part: all you need to do is exchange their altcoins for a stablecoin like Attached which is pegged to the US dollar to lock in profits after a bull run.
An innovative exchange
But PancakeSwap isn’t just about buying and selling crypto. For starters, users can put their PancakeSwap tokens into pools to validate transactions on other blockchain networks, earning them considerable interest. In addition, users can also cultivate returns by providing trading liquidity with their PancakeSwap tokens, of which PancakeSwap is worth $ 6 billion per day. In addition to this, the platform recently integrated Non-Fungible Tokens (NFT).
So why invest in PancakeSwap?
Pledging PancakeSwap tokens for yield farming or validating transactions removes tokens from its available float, causing artificial scarcity that elevates its price levels. Additionally, a small amount of PancakeSwap units are burned with each trade, and its developers also buy back tokens on the open market for cancellation (similar to stock buybacks). The exchange burned 5.3 million PancakeSwap units in a week in July alone, and its total supply now stands at 217.3 million. The more the supply decreases, the more the product becomes scarce, which leads to a subsequent surge in prices.
Overall, expect further capital inflows into this promising token due to the record interest in the Decentralized Finance (DeFi) space. With the exchange offering universal access to altcoins, the token being useful for pledging, and a âcryptocurrency redemption protocol,â the future is bright for PancakeSwap.
This article represents the opinion of the author, who may disagree with the âofficialâ recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.