PancakeSwap is an Automated Market Maker (AMM), and the Exchange is at the heart of PancakeSwap. PancakeSwap is the leading AMM on the Binance Smart Chain, and as statistics tell, the most popular Decentralized Exchange (DEX) ever!
The PancakeSwap Exchange offers several features that support decentralized trading:
PancakeSwap lets users trade without the need to go through a Centralized Exchange. Everything you do on PancakeSwap is routed directly through your own wallet—no need to trust someone else with your coins!
You can only swap tokens on PancakeSwap if there is enough liquidity for those tokens. If nobody has added much liquidity for the token or tokens you want to swap, it will be difficult, expensive, or impossible to do so.
Providing liquidity will get you LP Tokens, which will earn you rewards in the form of trading fees for making sure there's always liquidity for the exchange to use.
Yield farming lets users that are providing liquidity earn CAKE rewards by locking their LP tokens into a smart contract. The incentive is to balance out the risk of impermanent loss that comes along with locking in your liquidity.
An Initial Farm Offering is an event that lets users buy into a limited-time offer to purchase new tokens. The IFO price is usually very generous.