In this post we are going to see how pancakeswap works, and how you can buy any cryptocurrency with this DEFI Exchange.
In this tutorial we are going to focus on how you can buy cryptocurrencies in pancakeswap, without going into detail on other functions such as farming or staking within pancakeswap. If you want a guide about it, you can leave it in the comments.
PancakeSwap is a decentralized exchange (DEX) built on the Binance Smart Chain (BSC). It is the largest Automated Market Maker (AMM) based exchange on the Binance Smart chain network. This is important, because you will only be able to buy cryptocurrencies that have a contract on the Binance Smart chain.
How to use Pancakeswap
If you are more of a video person, you can watch the tutorial below to see step by step how you can use pancakeswap, focusing on how to buy the cryptocurrency you want on this exchange. It doesn’t go into details on farming or pools, but if you want to know the cheapest and least commissioned way to buy any cryptocurrency with Pancakeswap, this guide is ideal.
Unlike uniswap, which is another DEFI exchange on the ethereum network, pancakeswap charges fees with Binance Coin or BNB. And the main difference and great popularity it is having is the low fees that pancakeswap has, with less than 1$, while uniswap is between 50 to 100$ per transaction.
You will need binance coin (BNB) in your wallet to be able to pay for transactions, although $10 or $15 is enough for many transactions. In this case, to show how it works, I am going to use the metamask wallet, although you can also use other wallets from the following list. The metamask wallet you will have to configure the binance network if you have not done it, I will leave a link in the description so you can do it.
Step by step
Before we go into more detail, you may be wondering how to have cryptocurrencies in your metamask wallet to use pancakeswap. In my case I use Binance for this, where I buy the cryptocurrencies, withdraw them through the BEP20 network, and I can have them in my metamask wallet to use it with a really low commission. Remember to buy BNB so you don’t encounter problems in transactions and can pay the commissions.
If you don’t have an account with Binance, you can create one here to be able to buy BNB or another cryptocurrency to have it in your metamask wallet.
With cryptocurrencies in your metamask, in my case USDT, the first step is to click on the connect button and click on your wallet. Here simply accept in your wallet and you will have it connected to use.
Let’s go to Trade and Exchange. Here in the from, is the cryptocurrency you want to trade and in to the cryptocurrency you want to get. The settings wheel, you can indicate the slipping tolerance, where you indicate the % you want to not execute the operation if the price varies by that %. If you do not touch it, it is usually at 0.5%, and so you make sure you do not change a cryptocurrency and the price fluctuates more than 0.5% and you lose out.
Another important aspect is that sometimes you will not find the cryptocurrency you want in the search engine. Let’s do the example with shopping, with the acronym spi. As you can see, it does not appear. In order to buy this cryptocurrency, we must paste the contract from your binance network. To do this, we can use the coingecko page, search for the cryptocurrency and copy where it says contract. Make sure it is from the bianance Smart chain, otherwise it will not work. Copy and paste it into pancakeswap, and as you can see, now it detects the token. Always copy the address from reliable sources, to avoid scams.
At the bottom, you will see the minimum you will receive, the price impact, the commission for the people who put liquidiez and the route it will take to exchange the cryptocurrencies.
Once you see everything correct, if it is a cryptocurrency you have never used before, you will have to approve it by clicking on approve and sign the contract. As you can see, it is just a few cents. And once approved, click on swap, confirm swap, accept in metamask and you will have the cryptocurrency exchange done.
This way, you can exchange any cryptocurrency from the binance Smart chain with your metamask wallet without using centralized exchanges and with really low fees.
Pancakeswap also has the possibility of providing liquidity in exchange for commissions, in farms and pools, although in this post we will not go into detail about staking within pancakeswap.