Overview By  Dmytro Litvinko
Newbie 610 29 Jan 2023

CAKE cryptocurrency review: features and prospects

By  Dmytro Litvinko 610 29 Jan 2023
Photo - CAKE cryptocurrency review: features and prospects

Decentralized exchanges might become the 2023 trend. It's time to look at their tokens, with CAKE being one of them.

After the FTX collapse, centralized exchanges received a lot of bad press. User trust has declined, and many of them have switched to decentralized platforms (DEX). DEXs will likely become very popular during the next bull run, so it's time to pay attention to their tokens. Let's start with CAKE, Pancakeswap's decentralized platform token.

What is Pancakeswap?

Since we are reviewing an exchange token, it is important to understand the platform's features and advantages over its competitors. Pancakeswap was created by anonymous developers in the second half of 2020 with the support of Binance. Now the platform is in the top 10 decentralized exchanges by trading volume, with more than 3.5 thousand trading pairs.

You can exchange and send tokens to liquidity pools or stake them on the platform. But an essential feature of the exchange is that it is built on the Binance Smart Chain blockchain. There are pros and cons here. The positive aspects include low fees and fairly fast transactions. On the negative side, the network is not as reliable as Ethereum. Yes, Pancakeswap works with the Ethereum blockchain, but optionally. However, the exchange is actively developing and has recently begun to support the new Aptos blockchain.

Pancakeswap has other features, namely futures trading, a bridge for transferring tokens between different networks, its own NFT platform, and an IFO platform. IFO on Pancakeswap is an initial token sale of new projects where you need to send CAKE tokens to the liquidity pool.

Furthermore, there are interesting sections like "Prediction" and "Lottery". "Prediction" is somewhat reminiscent of binary options, where you guess whether the CAKE price will go up or down in the next five minutes. Users invest CAKE tokens in a prize pool distributed among those who made a correct prediction. In the "Lottery" section, you can buy tickets with a set of numbers for CAKE tokens. The more winning numbers you have, the more you can win.

How the CAKE token is used

A significant point for a token is its scope. The more the token is used, the greater its value. First, CAKE is a governance token that gives the right to vote on the development of the exchange. With the voting, a restriction on the token emission was introduced, and support for the new Aptos network was added.

The IFO platform plays a vital role in using the CAKE cryptocurrency. You need to stake CAKE tokens to participate in public sales of new projects. The more you stake, the more allocation you get. The duration of staking also affects the allocation size.

CAKE tokens are also used as a commission to confirm specific actions and a fee for NFT, which is needed to create a profile. Without a profile, you will not be able to participate in the IFO.

As stated, Pancakeswap exchange tokens are also used in gaming sections, such as "Prediction" and "Lottery". At the same time, 20% of the lottery prize pool is burned. Burning tokens is essential in tokenomics, as it positively affects the price.

How to add CAKE tokens to Metamask?

Adding CAKE tokens to Metamask is very simple. Select the Binance Smart Chain network in your wallet and click the "Import tokens" button. In the search bar, paste the contract address 0x0e09fabb73bd3ade0a17ecc321fd13a19e81ce82 and select PancakeSwap Token. Click "Next" and confirm the import. Voila!

Where to buy CAKE cryptocurrency?

CAKE tokens are traded on many centralized exchanges, including WhiteBit, Huobi Global, Binance, Kucoin, and Bybit. Of course, the CAKE cryptocurrency can also be bought on the Pancakeswap decentralized platform. The token is still not listed on major exchanges such as OKX and Coinbase, so there is still room for a listing.

Prospects for the CAKE token

To assess the prospects of a particular cryptocurrency, you need to consider different aspects: methods of use, platform popularity, emission, and market conditions.

There are plenty of ways to use CAKE tokens on the exchange, which is good. The emission is limited – this is a positive factor in the long term. But it should be taken into account that only 22% of the tokens from the total supply are currently in circulation. Meaning that more CAKE tokens will be issued, which can be sold on the market and thus reduce the price.

You also need to understand that CAKE is an exchange token, and its value depends on how well the exchange performs. If something goes wrong with Pancakeswap, the price of CAKE could dramatically collapse. But, if the decentralized platform becomes more popular, this will provide good growth for the token.