How to use PancakeSwap to exchange Binance network tokens?

Pancakeswap home screen.

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PancakeSwap is a decentralized exchange that allows the exchange of any BEP-20 token, that is, that is developed on the BNB Smart Chain network (formerly called Binance Smart Chain).

It provides the ability to make two types of trades: instant and limit orders. In the first of them, the tokens are exchanged at the average market price. On the other hand, in the second, the order is executed only when the token to be exchanged reaches a certain price.

In this tutorial, you will learn how to perform these two operations. If you follow the steps described here, you can make exchanges between the more than 400 tokens available on PancakeSwap.

What do you need to use PancakeSwap?

To use PancakeSwap you need three elements: a web browser, a wallet compatible with the Binance network and have enough of the cryptocurrency BNBwhich you will use to pay commissions.

In this tutorial we will provide the examples using the Metamask extension in the Google Chrome browser. You will need to have the wallet configured for the BNB Smart Chainfor which you can read the tutorial “How to configure Metamask for Binance, Avalanche, Polygon and other blockchains”.

The commissions you will pay depend on how congested the network is. At the time of this publication, they are around $0.10 per trade. So if you have the equivalent of about $5 or $10 worth of BNB, you’ll be able to do several dozen transactions. You can buy BNB on various exchanges including, Binance.

How to exchange tokens instantly on PancakeSwap?

First, go to the website pancakeswap.finance. You will see the following home screen:

Pancakeswap home screen.
PancakeSwap is the most used decentralized exchange on the BNB Smart Chain. Source: pancakeswap.finance.

Click on «Connect Wallet» (connect wallet) and your Metamask will automatically open. It will ask you for authorization to make the connection. When that happens, in the wallet click “Accept”. Remember that you must select the BNB Smart Chain network in order to trade on PancakeSwap.

With your wallet connected to the exchange, go to the top left of the screen, display the menu «Trade» (trade) and click «swap” (to exchange).

Trading Swap at Pancakeswap.
PancakeSwap allows two types of exchange: “swap” and “limit”. Source: pancakeswap.finance.

Once you do that, a new screen will open. There, everything is quite intuitive. You are shown a price chart and a chart in which you must choose which token you want to send and which token you want to receive in return. To exemplify the operation, we will send BNB and receive CAKE in return.

BNB/CAKE trading swap.
In “swap” tokens are exchanged instantly at market price. Source: pancakeswap.finance.

In the upper box, fill in the amount of the token (in this case BNB) you want to change. This amount cannot exceed the maximum you have. Also, it is recommended that you never stay with less than 1 or 2 dollars in BNB to be able to pay commissions.

BNB to CAKE conversion at Pancakeswap.
The conversion is done automatically by the platform
and you can see it before authorizing the exchange. Source: pancakeswap.finance.

PancakeSwap will show you how much of the other token (in this case CAKE) you will receive. If you agree, click «swap».

A new box will open detailing the exchange and asking for confirmation again. Click on «Confirm Swap» (confirm exchange).

Once you do this, you must give a third confirmation, this time in your Metamask. There you will see what is the commission to pay. If you want to proceed, in the wallet click «confirm” and ready! The exchange will be executed and you will be able to see in the wallet that the new tokens are in your address.

Swap confirmation in Pancakeswap.
Metamask asks you to authorize the transactions and informs you
what is the commission you will pay. Source: Metamask.

How to exchange tokens at a certain price on PancakeSwap?

If you do not want to exchange the tokens at the current market price, but at a price that you chooseyou must click on «Limit» (limit), within the menu «Trade».

Trading Limit at Pancakeswap.
In «Trade» you must choose what type of exchange you will carry out. Source: pancakeswap.finance.

A screen very similar to the one in «swap». The difference, as you can see in the image below, is that the box «Price” (price). Over there you must place the price at which you want to make the exchange.

To exemplify the operation, we will exchange BNB for the stablecoin Tether (USDT), which maintains its price parity with the US dollar.

BNB to USDT conversion on Pancakeswap.
If you use a limit order, the trade will be executed
when the token reaches a certain price.
Source: pancakeswap.finance.

The chart above shows how to do the trade. In that box, put how much BNB (or the token you want) you want to exchange.

In the box “Price» choose at what price you want to do it.

In the middle box, PancakeSwap will automatically tell you how much USDT (or the token of your choice) you will receive when the market price of the token reaches the chosen price.

Something important to keep in mind when deciding if this is a good option or not for you: the “Actual Execution Price» (actual execution price) will generally not match the one you chose.

PancakeSwap explains why: «[Este precio] takes into account the gas required to execute your order and ensures that the desired commission is met. It fluctuates according to the price of gas».

For the case of the example, the order will be executed only when 1 BNB is equal to 656 USDT (and not 600 USDT as we selected).

If you agree with everything, click «Place an order» (enter an order). An information box will open with the details of the transaction that you must confirm. After that, confirm the operation in your Metamask (which will open automatically when the time comes)… and voila! You have a limit order waiting to be executed when the market reaches the selected conditions.

conclusion

The PancakeSwap decentralized exchange is easy to use and intuitive. To make exchanges at market price, it is a good option within the BNB Smart Chain network.

On the other hand, to make trades at a limit price, it may not be the most convenient, if you take into account that the real execution price does not coincide with the selected price. maybe use a centralized exchange like Binance be a better option, although this will depend on the needs of the user. Unlike PancakeSwap, Binance will require you to register and provide personal details in order to use it.

Finally, we will mention that PancakeSwap also provides the ability to be a liquidity provider and earn tokens for that activity. If it is of interest to you, you can read the tutorial “How to earn tokens from the Binance network with PancakeSwap?”, which was prepared by CriptoNoticias.

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