PancakeSwap

PancakeSwap is the largest decentralized exchange on BNB Chain and one of the highest-volume automated market makers in the industry. CAKE is its native token. The platform launched in September 2020, shortly after the automated market maker model proved itself on Ethereum, and grew quickly by offering the same functionality at a fraction of the transaction cost.

An automated market maker replaces the order book with liquidity pools. Users deposit pairs of tokens into a pool, and traders swap against that pool at a price determined by the ratio of assets in it. Liquidity providers earn a share of the trading fees in exchange for supplying capital and taking on impermanent loss risk.

Product range

PancakeSwap has expanded well beyond swapping. It offers yield farming, staking pools, perpetual futures, a launchpad, prediction markets, and lottery products, and has deployed to several networks beyond BNB Chain including Ethereum, Base, Arbitrum, and Solana. This breadth has made it one of the most feature-dense decentralized exchanges.

The CAKE token

CAKE has a maximum supply of 400 million tokens, with total supply currently at roughly 334 million and around 322 million circulating. The token was originally inflationary, emitted continuously to reward liquidity providers and farmers, which put constant sell pressure on it.

Governance has since reworked the tokenomics several times, reducing emissions and introducing burn mechanisms funded by trading fees and other platform revenue, with the stated aim of making CAKE deflationary. The emission and burn parameters are set by governance and have changed repeatedly, so checking the current schedule is more useful than relying on older descriptions.