PancakeSwap offers many ways to make passive income from the cryptocurrency industry. However, making passive income on PancakeSwap can be a little tricky due to Impermanent loss but with this PancakeSwap farms review, you’ll learn all about PancakeSwap farms, syrup pools, and how to get started in no time.
Let’s ride on!
PancakeSwap Farms explained: What are PancakeSwap Farms?
PancakeSwap farms are a great way to earn CAKE rewards on PancakeSwap. Unlike Syrup Pools, PancakeSwap liquidity farming requires you to stake two tokens (i.e. you stake in pairs) to get LP Tokens, which you then stake in the Farm to earn rewards.
This lets you earn CAKE while still keeping a position in your other tokens. Also, it should be duly noted that PancakeSwap farm comes with a risk of Impermanent loss. It’s not as scary as it sounds, but it is worth learning about the concept before you get started. Check out this great article about Impermanent Loss in DeFi.
PancakeSwap Farms VS Pools
PancakeSwap farms and pools: learn what they are and how to interact with them and get started in no time.
PancakeSwap Farms and How they work
In Farms, you can stake both LP tokens and other tokens in order to receive income in tokens of the protocol (PancakeSwap, CAKE) you are using.
PancakeSwap produces farms when you select the Farms tab. Switching the toggle to “Live farms” displays all available farms currently allowing you to see what’s going on. There should be a long list of options populating the page, including many farms with BUSD and BNB base pairs.
You can click on the “Details” tab to see how much each farm earns in CAKE. A number of PancakeSwap farms earn well over 200% APY, such as DUSK-BNB.
PancakeSwap will prompt you to unlock your wallet after clicking Details to detect the currencies inside and allow them to be deposited into the farm. After you have deposited, your CAKE earnings will appear on the page.
PancakeSwap Pools and How they work
PancakeSwap syrup pools entail staking PancakeSwap CAKE (usually a protocol token) into a smart contract to earn other tokens.
You can enter a Syrup Pool by clicking on Pools, finding the one that appeals to you, then depositing your CAKE and start receiving other tokens.
pancakeswap farms review: How PancakeSwap Farms Work
Setting up takes a while but with the right guide, you can get started in no time. So here’s the gist: LP Tokens are required to get into a farm. Farms can only accept their own exact LP Token; for example, the CAKE-BNB Farm will only accept CAKE-BNB LP Tokens.
To get the exact LP Token, you’ll need to provide liquidity for that trading pair. So to get CAKE-BNB LP Tokens, you’ll first have to provide liquidity for the CAKE-BNB pair. Sounds confusing? Well, don’t worry with our detailed steps you can get started in no time.
Before we commence, you’ll need to choose a farm that’s right for you. Visit the Farm’s page to see a list of all the available farms.
Now you can choose another sorting option if you like, such as by APR for the farms with the highest reward rate at the time. When you find a Farm that you’d like to use, note down the trading pair, e.g., BNB-CAKE, just in case you need it later.
Now that you’ve found a farm to stake in, you’ll need to add liquidity to get your LP tokens.
Click on the row of the Farm you’ve chosen from the list. It will open to show more details.
On the left, you’ll see some links. Click the “Get CAKE-BNB LP link.” Just in case you selected a different pair, you can click on it.
How to stake your LP Tokens into a farm
Now that you have your LP Tokens, you’re ready to start staking them in a farm and earning rewards
Go back to the Farm’s page and locate your farm. Click anywhere on the row showing your pair. It will expand to show more details. When you’re ready, click the Enable button and confirm your action in your wallet.
After a short wait, the enable button will change to stake LP. Now click on “Stake LP,” and a new window will appear.
Type the amount of LP Tokens you’d like to farm with into the field, or just click “Max” to use all of your LP Tokens.
When you have the amount entered, click the “Confirm” button. Your wallet will ask you to confirm your action.
After a short wait, the window will close, and you will see your new staked LP Token balance in the details.
Note: When you are farming on a different blockchain than the BNB chain. You will need to wait approximately 30 minutes for the cross-chain transactions to confirm.
Also, note that you can also add and remove LP tokens from your Farm, in case you’d like to add more LP tokens to it at a later date or take some out of a Farm.
PancakeSwap Farms review: How to claim your Farm rewards
Over time, PancakeSwap yield farming can bring you cake rewards. Pancake swap yield farming can result in cake rewards over time. You can claim these rewards and use them to get more LP tokens, stake them in Syrup Pools, use them to play Lottery, etc.
If you’d like to collect your farming rewards only, follow along.
To collect your rewards, you’ll need to visit your chosen Farm and collect the CAKE waiting for you.
Click here to return to the Farm’s page.
To begin, locate the farm where you staked your LP Tokens and click the row to view details. You should see an estimate of your rewards under “CAKE earned.”
Now click the “Harvest button” and confirm the action in your wallet.
After a short wait, the CAKE will be claimed in your wallet for you to use as you like.
Note: When you are farming on a different blockchain than the BNB chain, you will need to always switch to the BNB Smart Chain to harvest your farming rewards.
If your wallet doesn’t support chain switching. Staking or unstaking LP tokens will always harvest your CAKE. Please note that the harvested CAKE will be distributed on the BNB Smart Chain.
PancakeSwap Farm Auction
The PancakeSwap farm auction is a simple way for project teams to bring volume and liquidity to their BSC tokens while also rewarding the liquidity providers of their tokens with CAKE to farm.
Each week, qualifying projects can bid CAKE for the right to host a 10-day Farm on PancakeSwap. Although you will not be able to participate if you are not part of a whitelisted project, you can still view what is going on.
The weekly farm auction is a platform created for projects to compete with each other through bidding for a week-long incentivized farm. Liquidity providers can farm CAKE at an extremely high Annual Percent Yield (APY).
PancakeSwap Farms review: How does it work?
Projects can submit an application to sponsor a yield farm and/or pool on PancakeSwap via the Application Form.
The PancakeSwap team will try to respond within a week.
Community Farm qualifiers will be asked to provide the address of the wallet they’ll use to bid on CAKE in the auction.
Core Farm/Pool qualifiers will receive further directions separately.
During the auction period, if you connect your project’s whitelisted wallet to the Auction page, you’ll see a “Place Bid” button when the auction is live.
You can then commit CAKE to bid during the auction, competing against other projects for one of the available farms.
If your bid was not successful, you can reclaim your CAKE on this page.
If your bid was successful, your farm will begin at the specified time. The CAKE you bid will not be returned to you and will be added to our weekly CAKE burn.
So long as you are whitelisted, you’ll be able to participate in each new auction.
If two or more projects bid the exact same CAKE amount and are contending for a spot in the winning bidders, their bids may be invalidated.
PancakeSwap Farming Calculation
This PancakeSwap Farms APR calculation includes both:
Farm base rewards APR is earned by staking LP Tokens in the Farm, and LP rewards APR is earned by providing liquidity.
Because when you staking your LP tokens in a farm to earn CAKE, it means you’re still providing liquidity to the liquidity pool, so you’ll earn LP rewards as well.
Calculating Farm Base Reward APR
The Farm Base APR is calculated according to the PancakeSwap farm multiplier and the total amount of liquidity in the farm — this is the amount of CAKE distributed to the farm.
Calculating LP Reward APR
Farmers receive LP rewards for providing liquidity. Here’s an example of calculating LP rewards:
In the WBNB/BUSD pair above, we see these values:
Volume 24H: $96.97M
Volume 7D: 709.73M
To calculate the annual fees
- Use the 24H volume to calculate the fee share of liquidity providers in the pool (based on the 0.17% trading fee structure): $96,970,000*0.17/100 = $164,849
- Next, use that fee share to estimate the projected annual fees earned by the pool (based on the current 24h volume): $164,849*365 = $60,169,885
Note: We can now use the annual fees to calculate the LP rewards APR: That’s annual fees divided by liquidity: ($60,169,885/$387,420,000)*100 = 15.53% APR on LP rewards.
PancakeSwap Farms review: Conclusion
PancakeSwap is one of the easiest and most trusted DEX platforms to use. It offers a broad variety of communities and farms/syrup pools for you to be a part of.
PancakeSwap will continue to add new pools and farms for its community in the future because it is the largest decentralized exchange on the Binance Smart Chain.