WHAT IS DEX, AMM, AND HOW TO USE PANCAKESWAP AMM DEX.

  1. Strong points of dex.
  2. Weak points of dex.
  3. What is amm dex and how it is different from dex?
  4. What are the strengths and weaknesses of amm system?
  5. What is Pancakeswap and how does it work?
  6. How to earn money by trading, staking, and farming on Pancakeswap?
  7. DePocket will have the update for staking DEPO tokens this December.
  • Unlike CEX, DEX — Decentralized Exchange is built for running in a decentralized way that allows peer-to-peer transactions. A DEX offers a priority to implement transactions directly from person to person without third-party involvement. Some of the typical DEX now are Pancakeswap, Uniswap, and Sushiswap.
  • In contrast to DEX, CEX just permits users to sign in to their accounts and conduct transactions under the strict control of a centralized system. This means that CEX diametrically possesses users’ coins, and certainly this exchange can block your account and you can lose all your coins.
  • As opposed to CEX, DEX provides a much better mechanism that protects users from personal information disclosure in which transactions are done by using the smart contract. DEX only knows your wallet address and your privacy is safely ensured.
  • In the case of DEX, it is impossible to hack and obtain money from users since tokens are traded on blockchain and controlled by nodes.
  • In comparison with CEX, liquidity supplied by DEX is much less. This comes from the fact that fewer traders are deploying DEX than CEX and the trading volume is consequently not high enough to contribute to a high liquidity level. In the future, I hope that this weak point will be significantly improved with various methods such as better user experience, enhanced user interface, and additional types of trading like margin trading.
  • However, DEX is capable of improving this weak point soon and attracting more users.
  • Unlike conventional DEX, AMM DEX is a kind of DEX that has an autonomous market maker system (AMM) that provides liquidity to the exchange it operates in through automated trading. Transaction on AMM DEX is not implemented based on the P2P scheme, but it is based on the P2C scheme (person to smart contract).
  • While all trading activities on old DEX are fulfilled using the order book of P2P scheme which needs to wait for being matched between buyers and sellers, AMM DEX creates liquidity pools including tokens to be traded by traders so that buyers do not need their orders to be matched to any seller.
  • In addition, the special thing about liquidity pools is that users can play a role as liquidity providers to put their assets into the pools and make liquidity for these pools.
  • Liquidity providers have other ways to make money as they can utilize the pool to stake and farm for earning reward tokens or receiving trading fees. This would lead to the result that more users will be appealed to use DEX and contribute to the Defi development in general.
  • Inflation is the next problem that we should care about. When a coin is not noticed and not traded much, it does not have much liquidity and its price will consequently decline to sell easier for covering loss.
  • The security problem is the vulnerable side of the system that should be enhanced as soon as possible. AMM DEX applies a P2C scheme in which the liquidity pool involves the trading process. Hence, hackers can attack these pools and take your money.
  • As same as the other AMM DEX, users who are liquidity providers can add tokens into liquidity pools and traders can swap these assets in these pools using the P2C scheme.
  • Pancakeswap is not simply an AMM DEX. Indeed, it has grown to become a payment center of Binance Smart Chain, which runs as a DeFi hub and provides various services to make money from staking, adding liquidity pools, farming to IFO, Syrup, Lottery.
  • PancakeSwap Official Website: https://pancakeswap.finance/
  • Select the wallet platform you want to connect
  • Choose the Binance Smart Chain and connect the wallet
  • Select the token you want to trade and add the token quantity
  • Check the details and click the swap button
  • Check again and click confirm swap
  • Select confirm button in your wallet
  • You can visit the link named “view on BSC Scan” to see your transaction details
  • Aside from that, after adding liquidity, liquidity providers then get the LP tokens that represent the value of already staked tokens and can use this to accordingly farm for cake tokens.
  • You can withdraw your tokens whenever you want.
  • Select Add liquidity.
  • Choose a pair of tokens to add to the pool to stake.
  • Notice that you need to adjust the values of these two tokens to be equal, then click the supply button.
  • Check the information and click the confirm supply button.
  • Select confirm in your wallet to stake a coin in the liquidity pool.
  • Select the Farm pool that you want to join.
  • Click select.
  • Click the figure +.
  • Add the quantity of tokens LP that you want to farm.
  • Select confirm.
  • Choose which Syrup Pool you want to stake in.
  • Once you choose a pool, click the Enable button. Your wallet will ask you to confirm the action.
  • The Enable button should now be replaced with Stake. Click the button to bring up the staking menu.
  • Type in an amount or slide the rabbit to choose how much CAKE you want to stake.
  • Click Confirm. Your wallet will ask you to confirm the action.
  • Furthermore, you will only need to use DePoket dApp to track, manage all of your assets and start earning money on various DEX effortlessly soon when upcoming new functions of staking, farming, and adding liquidity pool are launched on Depocket successfully, instead of having too many dApp.

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