In this educational guide, we’re going to explore the altcoin named PancakeSwap (CAKE). We’ll cover its fundamentals and planned roadmap, so you can use it to make your own price prediction.
What is PancakeSwap and how does it work?
CAKE is a decentralized exchange (DEX) token that has a home on the DEX called PancakeSwap built on the Binance Smart Chain (BSC) network.
PancakeSwap, the decentralized exchange and automated market maker (AMM), is a fork, or copy, of the popular DEX known as Uniswap on the Ethereum network. This means its functionality is identical in its base code, but since the PancakeSwap DEX is built on the Binance Smart Chain (BSC) network instead of the Ethereum network, its transaction fees are significantly cheaper and transactions much faster.
For example, when PancakeSwap saw the greatest surges in user adoption in early 2021, transactions on Ethereum were priced at between $20-100 on average for a transaction. Transactions on PancakeSwap and on the greater BSC network, in comparison, were able to be conducted for less than $1.
The PancakeSwap DEX and AMM allows users to trade BEP-20 (BSC) tokens against a liquidity pool, provide liquidity to the exchange itself to earn fees, stake LP tokens to earn CAKE tokens, stake CAKE to earn more CAKE tokens, as well as to stake CAKE to earn rewards in other project tokens.
PancakeSwap also offers additional features that Uniswap or SushiSwap does not, such as yield farming across protocols, lotteries, betting and prediction markets, and initial farm offerings (IFOs). The PancakeSwap DEX was originally launched by an anonymous group of developers in September of 2020 but did not see widespread adoption until February 2021.
The Pancakeswap DEX also offered a lower swap fee of 0.2% which was lower than the industry standard of 0.3% at the time. Along with continued innovation with the fork, rapid user growth and Total Value Locked (TVL) in the wake of skyrocketing Ethereum mainnet fees, and support from the Binance brand as a whole informally, PancakeSwap became a leading DEX at the top in terms of trading volume, comparable to Uniswap.
CAKE Token
The CAKE token currently exists as a BEP-20 native token, which means it is only available on the Binance Smart Chain (BSC), which is an EVM-compatible chain that functions much like Etheruem.
The main use case of the CAKE token is to vote, as it functions as the PancakeSwap DEX’s native governance token.
Like many other automated market maker (AMM) models, users of PancakeSwap receive Liquidity Provider (LP) tokens by providing liquidity towards liquidity pools available on the platform. LPs can then stake their LP tokens and receive CAKE tokens as rewards. CAKE tokens themselves can also be staked on the PancakeSwap Pools/Farms area to earn anywhere from 49-63% APY at the time of writing, in April 2022.
Token Distribution
The initial distribution of the CAKE token happened through a fair launch. The initial distribution was 75% to farmers and 25% to SYRUP token holders (another token on the PancakeSwap DEX).
The initial liquidity pools (LPs) for farming CAKE tokens had different reward multipliers to incentivize liquidity into selected pools. Initially, the emission rate of CAKE was 40 CAKE per block which procured 1.2 million of CAKE tokens per day, as new, inflationary tokens.
PancakeSwap (CAKE) Price History & Technical Analysis
As of the time of writing, in April 2022, the price of CAKE is at $7.63, with a market capitalization of $2.1 billion USD.
The total value of CAKE grows as the user adoption of the PancakeSwap DEX/AMM continues to grow, but this effect is not direct, and it should be noted that the CAKE token has highly inflationary token emissions, and the PancakeSwap DEX, while still a notable DEX, has many competitors in a fragmented, multi-chain blockchain ecosystem today.
Regardless, Metcalfe’s Law states that the value of a network is directly related to the number of users of that network, so if PancakeSwap continues to innovate and wins the DEX/AMM arms race, the CAKE token can still stay in the spotlight and continue to do well, potentially even as an investment.
What Expert Analysts say about CAKE:
- Wallet Investor says, “According to present data PancakeSwap (CAKE) and potentially its market environment has been in bearish cycle last 12 months (if exists). Our Ai cryptocurrency analyst implies that there will be a negative trend in the future and the CAKE are not a good investment for making money. Since this virtual currency has a negative outlook we recommend looking for other projects instead to build a portfolio.”
- CRYPTOPOLITAN says, “Pancakeswap price has been rising through 2021 and began correcting in 2022. We anticipate the Pancakeswap price to trade higher at $9.01.
Cake Price Prediction 2023:
While there are divergent opinions on future prices, we remain optimistic that prices will begin rising in 2023. The cake will trade at a mean price of $13.23 soaring ranging between $15.3 and $12.78.” - DigitalCoinPrice gave a bullish CAKE coin price prediction: “By the end of the year, PancakeSwap is expected to reach a minimum fee of $9.31. In addition, the CAKE price is capable of getting a maximum level of $10.31.”
CAKE Partnerships
For assessing the partnerships of the CAKE token, it is best to consider those of the PancakeSwap DEX, since CAKE is a DEX token. PancakeSwap has forged many partnerships within the Binance Smart Chain ecosystem since its inception in 2002. For example, any new project can apply to run an IFO (initial farm offering) on PancakeSwap, a form of a partnership with the protocol. PancakeSwap also regularly adds new and upcoming tokens and projects to its yield farming options.
Since PancakeSwap is built on top of the Binance Smart Chain (BSC) which was incubated and created by world-leading exchange Binance, it can be considered informally partnered with Binance. There are no other major partnerships with major public companies otherwise, but it has been noted that the PancakeSwap exchange and AMM was a fork of the popular Uniswap exchange on Ethereum.
CAKE Price Prediction: 2022-2026
After a launch in late 2020, the CAKE token saw increasing bullish price pressure and exploded to a peak of almost $40, came down, and then increased again hitting almost $50 during April of 2021.
Since then, CAKE has been on a steady downtrend and unable to reclaim its all-time high of that time. After the cryptocurrency markets saw some upward pressure in August of 2021, CAKE was able to see above $20 again, but the price has been in a steady downtrend since then once again.
Today, the CAKE price sits at just above $7 and has not yet established any clear uptrend that signifies that its bearish days have come to a close. Hence, and given the fact that CAKE is an inflationary token with no capped supply, it may be ideal to avoid CAKE as an investment at the time being, at least until a clear uptrend forms or the price reaches a prior stronger support, such as below $4.
It’s uncertain to say when investors can expect the previous all-time-high to be breached, or whether a greater economic contraction will occur that leads to overall losses in the cryptocurrency markets. If a contraction occurs and the CAKE price loses the $4 area, we expect it to take even longer for a new high to be reached.
CAKE Price Prediction 2022
Some analysts predict that CAKE will see beyond its previous all-time high during 2023-2025 depending on the growth and sustainability of the PancakeSwap DEX and AMM, but this is dependent on the overarching DEX trends alongside other Layer-1 and Layer-2 blockchain trends, as well as the launch of Ethereum 2.0. It depends on whether the crypto market resumes its bullish price action as well.
We think it is reasonable that if bullish price pressure resumes, CAKE can see $10 or higher in 2022.
CAKE Price Prediction 2023
If the Binance Smart Chain remains highly used, and crypto remains bullish, CAKE can see a target of potentially $15 by 2023.
CAKE Price Prediction 2024
The overall growth of the cryptocurrency markets may contribute to CAKE’s growth as well in addition to the greater trend of DEX’s/AMM’s since users are seeking more decentralized and permissionless ways to transact with their funds.
The market capitalization alone remains at only $2.17 billion in April 2022, and a reasonable 2-4x to reach $4.3-8.6 billion in market cap by 2024 would put the CAKE price at $15.38-$30.76 price range or higher by 2024.
It’s not unreasonable to see CAKE hit these prices by 2024 with continued innovation and development. Of course, this is also provided the overall crypto market remains bullish and we can avoid an economic downturn and bear market overall.
CAKE Price Prediction 2025
2025 is still far away at the time of this writing and longer term blockchain and DEX trends are impossible to predict. However, the growth of user adoption of blockchain, crypto trading, and most likely DEX’s which are cheaper to transact vs. Ethereum will only increase.
We predict we will see CAKE at $25 or above by 2025, but it’s possible the token could become irrelevant if a new DEX becomes prominent. CAKE could just as easily go to $0 by 2025.
CAKE Price Prediction 2026
The crypto market overall could be worth $10T or even as high as $15T in total market capitalization by 2026. Depending on regulations and the overall economic cycles of the economy, we may see CAKE as high as $30-$35 by 2026, if its protocol does not disappear by then.
None of these predictions are financial advice, and are educated guesses as to where CAKE’s price may be at each time interval. It should be noted that any black swan events such as a catastrophic failure of the PancakeSwap DEX, failures of the BSC network, the hack of the DEX or AMM, a cease in development, or other black swan events could impact these predictions significantly.
PancakeSwap (CAKE): Conclusion Price Prediction
The CAKE token is the native token of the PancakeSwap DEX on the Binance Smart Chain network. It became the most popular DEX coin in early 2021 when PancakeSwap matched the popular DEX/AMM known as Uniswap due to Ethereum transaction fee and throughput woes.
While the CAKE token has done well in the past, it should be noted that it is an inflationary farming token with no capped supply, is currently in a clear downtrend with no end in sight just yet, and it is very uncertain as to what the status of the PancakeSwap DEX and AMM will be in a 3-5 year time horizon.
As such, CAKE is one of the most uncertain and riskier investment choices in crypto. However, if PancakeSwap and the BSC network retain supremacy for users and investors alike, and the DEX continues to innovate, then CAKE can stay a relevant token, but it is uncertain when it can see its “blow off top” all-time high of $44.18 again, if ever.
Some may be hesitant to commit their money into an asset for an extended period of time due to the extreme volatility and risk of the cryptocurrency markets. This hesitancy in this case for CAKE makes sense.
FAQs
How is PancakeSwap gaining traction?
CAKE gained traction largely in 2021 due to the rise of the PancakeSwap DEX and AMM as users moved over to using it from the Ethereum network’s Uniswap and SushiSwap due to rising gas fees and slow throughput.
Investors and market participants were interested in its coin, CAKE, due to innovation from the PancakeSwap DEX, the farming features, and the yield CAKE continues to offer to this day. As of right now, the CAKE token is not yet gaining new traction.
Where can I buy PancakeSwap?
CAKE, the coin, can be bought and traded on many exchanges including Binance, Gate.io, KuCoin, Huobi, KuCoin, Bybit, and even the PancakeSWAP DEX itself, of course. This means that both US and international investors can invest in CAKE, without even needing KYC if using a DEX to do so.
In comparison to other cryptocurrencies, how can PancakeSwap secure privacy?
PancakeSwap, the DEX and AMM protocol itself is a permissionless exchange that does not collect identifying KYC info on any traders or users. As such, it secures privacy for trading and swapping assets. But as far as a blockchain protocol goes, all transactions are recorded in the BSC ledger of transactions. Privacy is not guaranteed, especially in comparison to other cryptocurrencies or blockchains that are especially known for securing privacy, such as Monero.
Any party concerned with full financial privacy should understand that the CAKE token functions on the public Binance Smart Chain blockchain and it is easy to identify the user with blockchain forensics.
Is it possible to stake PancakeSwap?
Yes, CAKE can be deposited into pools and farms on the PancakeSwap DEX for APY as high as 69% at this time.
Why is PancakeSwap on the rise?
CAKE was on the rise thanks to the growth of the PancakeSwap DEX and AMM, but as of late, the rise of CAKE in terms of its price has stopped. Some good metrics to watch the rise of CAKE again would be to check the statistics of the PancakeSwap DEX volume and TVL and compare it to other DEXs.
Is PancakeSwap completely anonymous?
No, PancakeSwap is not fully anonymous to use, since it functions on a public blockchain. However, using the protocol’s DEX itself does not require identification.
Is CAKE considered a currency?
No, the CAKE token is used only for governance and voting. It can also be earned, sold, and staked to earn more CAKE or other coins.
Is it possible to generate profits with PancakeSwap?
Maybe, assuming the CAKE token increases in price over time with the continued development of the PancakeSwap DEX, its IEOs and partnerships, the value of the network and its token in turn will increase if the high inflationary effect on the token does not impact price more negatively.
However, this is not guaranteed due to other factors that can affect the investment and the overall cryptocurrency markets.
All investors must do their own research, due diligence, and ensure that they are comfortable with the amount of risk they are taking. All cryptocurrencies are extremely volatile and risky. Always proceed with caution.
Why do people believe in PancakeSwap?
Some analysts and investors believe that CAKE is a strong contender token if compared to Uniswap’s UNI and SushiSwap’s SUSHI token. These are all DEX tokens that function on different blockchains. Bullish investors believe that the PancakeSwap DEX will keep innovating and function in the long term and that the CAKE token will continue to play an integral role in the function of the DEX.
Is PancakeSwap supply limited?
No, the CAKE token supply is not limited. It is uncapped.
How does the PancakeSwap team investigate suspicious or fraudulent transactions?
It is not clear how the PancakeSwap team investigates suspicious transactions. Any fraudulent or suspicious activity can be noted on bscscan for the BEP-20 token, since all activity is performed on a public ledger.
DISCLAIMER
This is not financial advice, only observations and speculation. All investors should do their own research and due diligence. The crypto markets are extremely volatile and losing your investment is possible.
