PancakeSwap - Coinapult

Blockchain technology has excelled and has become a mainstay alternative to traditional financial systems. While it ensures seamless, secure, and decentralized finance, it also gives limitless opportunity to financial dependence. Decentralized Finance (DeFi) has grown in popularity and birthed many newer innovative concepts like Yield Farming. Yield farming is an old but vital core concept of modern-day decentralized finance (DeFi). Essentially, Yield Farming allows you to earn yield rewards or cryptocurrencies by holding or dedicating your token in permissionless liquidity protocols. Yield Farming is a concept that has changed our view of HODLing. You can earn extra money passively by dedicating your assets. Therefore, why keep your money idle in your wallet when you can earn extra money with it? If you're thinking of earning money with yield farming, this article will put you through a step-by-step guide on how to farm CAKE on Pancakeswap. However, before we proceed, let's take a deeper look at yield farming, how it works, and how much you can earn farming CAKE on Pancakeswap. Yield Farming on Pancakeswap Over the years, yield farming has been a popular way of earning with DeFi. It is closely related to staking, and it is a way of earning passive returns by locking your cryptocurrencies. Also called liquidity mining, it works by rewarding farmers who are liquidity providers after they lock their assets in a time-based smart contract liquidity pool. In this case, you're farming on the Pancakeswap Liquidity Pool. As a yield farmer, you will dedicate your crypto assets to a liquidity pool. This liquidity pool is a smart contract that contains funds, and it usually powers a DeFi protocol where other people can exchange tokens, borrow, or lend them. Typically, these protocol users pay meager fees for transactions, interests, or usage. The accrued revenue is shared among yield farmers according to their share of the pool. Therefore, the more the participants, the lesser the reward that gets to each farmer. While the rule of operations or distribution of accrued reward can vary with yield farming protocol, the basic concepts of yield farming are the same. 6 Steps to Farm CAKE on Pancakeswap Farming CAKE is an easy and passive way to earn extra CAKE tokens on Pancakeswap. Unlike normal tokens staking or syrups pools, farming requires you to stake two tokens. This will give you the liquidity provider (LP) tokens you need to farm. Yield farming is also more profitable than regular staking or syrup pools. However, the higher the reward, the higher the risk. To farm CAKE, you must get an LP token paired with CAKE. For instance, CAKE-BNB for CAKE-BNB farm. To do this, you must fund your wallet with enough BNB so you can swap some for CAKE tokens. Once you have CAKE tokens, you need to provide liquidity for the CAKE-BNB pool to get LP tokens. Afterward, you can farm the LP tokens. Here's a step-by-step guide on how to farm CAKE on Pancakeswap: Log in/sign up on Binance Fund your wallet with BNB Transfer BNB to the crypto wallet Exchange BNB for CAKE Provide Liquidity for CAKE-BNB Pool Farm LP Tokens Log in/sign up on Binance The first step to farming CAKE on Pancakeswap is funding your wallet with enough BNB. This way, you can swap your BNB for some cake before farming. To do this, navigate to www.binance.com on your web browser. You can also buy BNB on any centralized exchange like Kucoin, Bybit, OKX, etc. Click on LOG IN from the top right corner of the Binance homepage. Enter your email address/phone number on the login page, then password. Complete 2FA verifications to access your account. However, if you're a new user, click REGISTER on the homepage to sign up with your email address/phone number and a strong password. After completing registration, verify your email address/phone number with the six-digit code sent to your inbox. Finally, go to ACCOUNT SETTINGS and submit a clear copy of a government-issued identity card for KYC verification. Fund your wallet with BNB Once you're in, it's time to fund your wallet with BNB. Click on BUY CRYPTO from the top left corner of the Binance home screen. Choose your preferred payment method. Proceed to select BNB and fill in the amount of BNB you'd like to buy, then click on CONTINUE. Confirm payment method and input payment details. Ensure you double-check your transaction details before completing 2FA verifications. Once the transaction is completed, your Binance wallet will be funded with an equivalent amount of BNB. Transfer BNB to a crypto wallet To withdraw the BNB to your crypto wallet, go to your crypto wallet and tap RECEIVE under BNB asset. Copy the deposit address and go back to Binance. Navigate to WALLET > FIAT AND SPOT > WITHDRAW. On the withdrawal page, select BNB and the asset you'd like to withdraw. Paste your deposit address in the field labeled ADDRESS. Select BNB Chain as the preferred network and input amount. Review the transaction details before clicking on WITHDRAW. Once you complete FA verification, the BNB will be withdrawn to your crypto wallet within 5 minutes. Exchange BNB for CAKE Once the transferred BNB is reflected in your crypto wallet, you can swap some or half of it for CAKE tokens. However, it is important to leave about $2 worth of BNB for gas fees. To swap BNB for CAKE, go to www.pancakeswap.finance. On the homepage, click on CONNECT WALLET from the top right corner. Click your preferred crypto wallet and approve the connection prompt in your wallet. Once connected, click TRADE NOW to go to Pancakeswap Swap. On the swap page, select BNB as the token you're swapping from in the first field and CAKE as the token you're swapping to in the second field. Input half or almost half the total amount of your BNB - or click on 50% to swap half your BNB balance to CAKE. Finally, click on SWAP. Double-check and confirm the transaction before approving it by clicking CONFIRM on the token approval prompt that pops up in your wallet. Provide Liquidity for CAKE-BNB Pool After swapping some of your BNB into CAKE, you can now purchase LP tokens to farm. To do this, visit the Pancakeswap Farm page at www.pancakeswap.finance/farms on your web browser. On the top right corner, click on CONNECT WALLET to link your wallet. Once your wallet is connected, scroll down to view a list of liquidity pools to farm. Select CAKE-BNB LP in the available options and click ADD LIQUIDITY to get started. Alternatively, you can click on ADD CAKE-BNB LP from the LP details. In the liquidity pool page, CAKE and BNB automatically appear as token pairs. The fee tier is also set at 0.25%. Proceed by entering the deposit amount in CAKE. The corresponding amount in BNB will be calculated automatically. Click on ENABLE CAKE. Then click on CONFIRM in the token approval prompt that pops up in your wallet. Finally, click on ADD to proceed with adding liquidity. Approve the transaction with the prompt that pops up in your wallet. Farm LP Tokens After adding liquidity, you will see the LP position under the CAKE-BNB farm. Within the farm, click STAKE in the position listed to start farming the LPs. Confirm the transaction in the prompt that pops up in your wallet, and voila! You've successfully farmed CAKE-BNB LP tokens. You can repeat the process for multiple CAKE-BNB LP positions available. Each position will yield different rewards based on the current APY. Meanwhile, you can unstake your positions anytime or harvest them after the staking duration. How to Calculate Yield Farming Rewards? The returns on yield farming are calculated as annualized returns. In other words, your estimated returns are pre-calculated based on a one-year reward. It is usually represented as Annual Percentage Rate (APR) and Annual Percentage Yield (APY). However, the main difference is that APR rewards are flat and don't take compounding into account. Therefore, with APR yields, you only earn the yield rate without any compounded yield. However, in APY yield, there is compounding. In other words, the protocol automatically reinvests your profit within the farming period to gain more yield. The choice of returns depends on the DeFi protocol or DEX you're farming with. With Pancakeswap, you can earn at least 34% up to 40% APR farming CAKE. Meanwhile, ensure you always check the yield before dedicating your tokens because yield farming is a highly competitive market, and the yield rates fluctuate. Conclusion Farming CAKE on Pancakeswap provides an extra use for your idly sitting assets, allowing farmers to earn a mouthwatering yield of over 40% on their investments yearly. Following the step-by-step guide above, you can delve into a lucrative world of passive income with Pancakeswap's myriad DeFi opportunities, especially by providing liquidity, staking, and farming LP tokens. Meanwhile, yield farming is dynamic. Therefore, you must stay ahead by monitoring yield rates before dedicating your assets to farms. Happy farming! Related Posts: How to Stake ALGO on Yieldly? How to Stake Cardano with Ledger Nano X?