Pancakeswap (CAKE)

Pancakeswap, a decentralized exchange (DEX) built on Binance Smart Chain, which is permissioned, so calling Pancakeswap a 100% decentralized exchange is debatable.

Basics

• Based in:
• Started in / Announced on:
• Mainnet release:

History

• From Decrypt (16-2-2021):

"Pancakeswap started off as a pale imitation of SushiSwap. Pancakeswap's use case was straightforward: Users provided liquidity to the platform (receiving FLIP tokens in return) and farmed SYRUP, the platform’s governance token.

This arrangement was similar to the many peer-to-peer exchanges that popped up in 2020 offering big “yields” to users becoming liquidity providers and the chance to govern the platform. However, newer products like a lottery service and a non-fungible token (NFT) art platform have furthered Pancakeswap’s use cases.

Audits & Exploits

• PancakeSwap has a 1,000,000$ bug bounty program with ImmuneFi, and it is an active program. (5-8-2021).
• Upgraded to a score of 73%:

"The team's anonymity poses questions about accountability. They demonstrate tested deployed code, but lack detailed test reports and formal verification. Strong auditing records with multiple third-party audits, and a significant bug bounty program, show a robust approach to security. However, the lack of comprehensive protocol monitoring is a notable gap. Although the code is immutable, the documentation falls short in explaining upgradeability and admin controls. Transparency about admin roles and capabilities is lacking, underscoring governance concerns.

There's adequate documentation on Oracles, including mitigation of flashloan attacks, suggesting a thoughtful approach to external data integration and security."

• Lowered back to 54% on DeFi Safety (20-6-2022). Mainly due to documentation, admin keys and oracle low scores.
• Got an updated score of 82% (5-8-2021):

"PakcakeSwap's core contracts have been audited by Certik, and twice by Slowmist. PancakeSwap's lottery V2 has been audited twice, and most of the changes recommended have been implemented. PancakeSwap's Peckshield Lottery V2 Audit. PancakeSwap's Slowmist Lottery V2 Audit."

With the comment: "PancakeSwap has updated their documentation and now has an impressive 82%. This makes them the highest-scoring BinanceChain protocol we've reviewed! PancakeSwap is clearly demonstrating a commitment to building a high-quality protocol users can trust."

• Previously scored 42% (4-5-2021):

"Certik has done an audit on PancakeSwap. The audit was done after deployment. The audit is not linked in the pancake swap website, github or docs. A major flaw in the syrup tokens was found and is not resolved in the deployed code, though they deprecated the pools. For these reasons a score of 40% is given." It scored very low on Access Controls, due to no information given.

Bugs/Exploits

• From BlockThreat (19-7-2021):

"PancakeSwap fixed a logic bug which could result in the loss of $700K after it was responsibly disclosed by Juno."

• From DeFi Safety (12-3-2021):

"PancakeSwap's lottery underwent a whitehack proceeding the discovery of a potential exploit. The whitehack is described in the following link under the pretense that PancakeSwap's admin performed the exploit maliciously, which is not true. However, it still describes the exploit quite well."

• From The Defiant (17-3-2021):

"Hackers compromised PancakeSwap’s and Cream Finance’s websites yesterday. The Domain Name Service (DNS) attack modified the affected protocols’ website to display a request for the user’s seed phrase, which, if submitted, would compromise their entire account. Because the attack was not on a smart contract itself it is still unclear how many users the hacker tricked into sending their seed phrase as well as the total amount the attack netted."

Governance

Admin Keys

• From DeFi Safety (20-6-2022):

"The relevant contracts are identified as upgradeable through a 3/6 Gnosis multisig, as identified here. The full extent of the contracts' change capabilities is not explicitly described, yet it can be assumed that they are mostly completely upgradeable through their 3/6 multisig. This proven in contract code. No pause control information is documented. No timelock information is documented. By reading the contract code, we learned there is a 6 hour timelock."

• Previously it scored very low on Access Controls, due to no information given. It got updated to 71%. From DeFi Safety (5-8-2021):

"PancakeSwap's admin controls are not well labelled and spread across multiple directories.

b) The type of ownership is clearly indicated (OnlyOwner / MultiSig / Defined Roles) -- 30%

c) The capabilities for change in the contracts are described -- 30%

Pause control is explained clearly but there is no evidence of regular testing."

Token

Utility

• The CAKE token is continually “burned” (16-2-2021).
• Through a vote it has been decided that CAKE will be burned with each trade (22-4-2021).

Other Details

• CAKE holders voted (27-4-2023) to reduce the huge inflation by over 68%.

Technology

• Whitepaper can be found [insert here].
• Code can be viewed here. From DeFi Safety (20-6-2022):

"PancakeSwap's contracts repository only has 1 commit, although the commit has 428 changed files with 116,992 additions."

• Built on: Binance Smart Chain

Upgrades

• PancakeSwap V3 will be released on the BNB Smart Chain in April 2023 (8-3-2023):

"It will be accompanied by a suite of upgrades to the service, such as more competitive trading fees and improved liquidity provisioning, according to the company press release."

Oracle Method

• From DeFi Safety (20-6-2022):

"No oracle information could be found other than a mention of Uniswap V2 in "pancake-smart-contracts/projects/exchange-protocol/"'s README. Although it is widely known that PancakeSwap is a 1:1 fork of Uniswap, this should be documented in a far more concise fashion. As a decentralised exchange, this information should be explained. No frontrunning information could be found. No information relating to flashloan price manipulation mitigation can be found."

Their Other Projects

Initial Farm Offering

• From Decrypt (23-2-2021):

"A gamified token launch mechanism called Initial Farm Offering, which allows anyone to earn new tokens by staking $CAKE and $BNB in an hour-long token sale."

Roadmap

• Can be found [Insert link here].

Usage

• From Kerman Kohli (4-8-2022):

"Pancake Swap coming in at $60m [revenue] in the past 180 days. As per their docs, on every trade there is a 0.25% fee on each trade. 0.17% goes to LPs, 0.3% goes to the treasury and 0.5% goes to token holders via a buy and burn. In this case it means that token holders and the treasury received $60m in the past 180 days which is pretty impressive. As of June 28, 2022 there are 350,000 CAKE being minted daily which equates to $72m of incentives being printed. Still profitable but a lot less than everyone thinks. I mean they don’t need to print that many tokens given the margins but my initial hunch here is that there’s a circular money game going on here."

• From Andrew Kang13-4-2021):

"PancakeSwap surpassed Coinbase Pro in volume today and 2.5x'd Uniswap volume This makes a DEX a top 10 exchange."

• From Decrypt (16-2-2021):

"Saw $400 million in trading volume yesterday and briefly became the world’s second-largest DEX service by trading volume, data from CoinGecko shows. With over $1.7 billion worth of various cryptocurrencies locked in the DEX.

As of today, there are over 176 markets on Pancakeswap. Wrapped BNB, a token issued by crypto exchange Binance, is the most traded market with over $81 million in volume in the past day. CAKE is next with a $45 million volume, and there are then the meme tokens like “Birthday Cake,” “Burger Swap,” and “Monster Slayer Cash,” which each account for much smaller volumes."

Competition

Other DEXs on Binance or other chains

Team, Funding, Partners

Team

• Full team can be found [here].
• Has an anonymous team (16-2-2021).
• From Kerman Kohli (4-8-2022):

"I decided to venture about who is behind Pancake swap and best guesses point to Binance."

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