What is PancakeSwap and how does it work?

PancakeSwap is a decentralized exchange, or DEX, where people swap crypto tokens directly from their own wallets. It is best known on BNB Chain, the network linked to Binance and its BNB coin. PancakeSwap's documents say it does not hold users' funds while they trade, and no registration is needed.

How does PancakeSwap work?

A user connects a wallet, picks two tokens and approves the swap. The trade is filled from liquidity pools, which are pots of tokens supplied by other users, or on some chains by professional market makers.

A tool called the Smart Router looks across PancakeSwap's different pool versions and can split a trade between them to get a better price. The swap screen shows the fee charged and which pool and fee tier the trade uses. Prices can still move between the quote and the fill, so users set a slippage limit.

As of October 2026, the docs list 11 supported networks: BNB Chain, Ethereum, Solana, Base, Arbitrum, Aptos, ZKsync, Linea, Monad, Robinhood and opBNB.

What is PancakeSwap used for?

Beyond swapping, the main uses are:

• Providing liquidity. Users deposit pairs of tokens into a pool and earn a share of trading fees. This carries the risk of impermanent loss.
• Farms. Liquidity providers can stake their pool tokens to earn extra CAKE.
• Syrup Pools. CAKE holders stake CAKE to earn other tokens.
• Games and derivatives. A lottery, a prediction game on whether BNB, BTC or ETH will rise or fall in five-minute rounds, and perpetual futures trading.

What are PancakeSwap v3 and Infinity?

PancakeSwap has released several versions of its pool design, and the Smart Router still draws on V2 and V3 pools. In V3, each pool was its own separate contract.

PancakeSwap Infinity is the fourth version. It went live on BNB Chain at the end of April 2025 and on Base in July 2025, Cointelegraph reported. Infinity keeps all pools inside a single contract, so creating a new pool is a cheap update rather than a new deployment. PancakeSwap says this cuts pool creation costs by up to 99% and makes Infinity more gas-efficient than V3. It also adds "hooks," small pieces of code attached to a pool that can change how it behaves, for example by charging custom fees. Hooks written by outside developers add a new layer of code that users must trust.

What is the CAKE token?

CAKE is PancakeSwap's own token. It is paid as rewards in farms and is used across its products. A vote in January 2026 cut the maximum supply from 450 million to 400 million CAKE.

New CAKE is issued as rewards, while some is destroyed in a token burn. Burns come from a share of spot trading fees, perpetuals profits and lottery spending. PancakeSwap says it aims for a net supply fall of about 4% a year.

The project retired its veCAKE locking and voting system in 2025, and stakers had until October 23, 2025 to redeem. For how PancakeSwap compares with another large DEX, see what Uniswap is.