Pancakeswap Vs Binance: Which Crypto Exchange Should You Choose in 2023 | Full Comparision

Binance is a newer cryptocurrency exchange that has quickly become one of the most popular options available. Pancakeswap, on the other hand, is an older exchange that has been around for a while. 

Pancakeswap vs Binance debate is over! This article discusses the different features of each exchange and why you might want to choose one over the other.

Overview

What is Binance?

Hong Kong’s Binance Exchange is a significant cryptocurrency exchange that was created in 2017. Changpeng Zhao is the CEO of Binance (aka CZ). Former manager of Blockchain.com’s Development Department, co-founder and technical manager of OKCoin, a once-famous cryptocurrency exchange.

It is heavily focused on altcoin trading. Binance facilitates crypto-to-crypto trading in more than 600 cryptocurrencies and virtual tokens, such as Bitcoin (BTC), Ether (ETH), Litecoin (LTC), Dogecoin (DOGE), and Binance Coin (BNB).

What is PancakeSwap?

PancakeSwap is a BNB Chain-native decentralized exchange. In other words, it is comparable to platforms such as UniSwap in that users can exchange their coins for other coins without the need for intermediary services.

The sole distinction is that PancakeSwap focuses on BEP20 tokens, a Binance-developed token standard.

BEP20 is a checklist of operations that new tokens must be able to execute in order to be compatible with the broader Binance ecosystem of dapps, wallets, and other services.

Read more: BEP2 vs BEP20 vs ERC20: Which Is The Best Choice For You 2023?

Pros and Cons

PancakeSwap Vs Binance: Which is Better?

Features

Binance

Swap Farming

Without the need to deal with third parties, Binance Swap Farming swaps currency pairings using an automated market maker (AMM) approach. Users of the exchange get immediate access to a liquidity pool where they can deposit or trade cryptocurrency pairs.

Typically, pairs of tokens are pooled together, and the swap price is based on the live ratio of those tokens. Swap Farming is a fascinating service that Binance customers may take advantage of, with reasonable access fees to these liquidity pools.

Margin & Leverage Trading

Users of the Binance cryptocurrency exchange can engage in margin and leverage trading. For seasoned investors and traders wishing to purchase futures contracts and speculate on the future price movements of premium assets, these choices are intriguing.

Trades on Binance might have a 20x leverage. While the likelihood of earnings rises as a result, the likelihood of losses also grows. Therefore, only users with a strong tolerance for risk should engage in margin and leverage trading.

Futures and Derivatives

Binance facilitates the trading of futures and derivatives and provides a variety of derivative products in various cryptoassets. Investors have access to leveraged tokens through this account, which stand in for open futures positions.

On Binance, users can access quarterly Bitcoin contracts in addition to the majority of derivatives, which are perpetual contracts.

NFT Marketplace

Binance provides millions of users with chances for diversity in the Web3 industry. In response to the current surge in interest in metaverse NFT projects, Binance has made its NFT marketplace available to investors.

To produce and sell non-fungible tokens, the objective is to unite creators, artists, and crypto fans on a single platform. Users can choose from three primary goods on the Binance NFT marketplace:

• Events: This feature offers premium and limited-edition NFTs by well-known international artists.
• Marketplace: With Binance, users can mint, buy, and place bids on the available NFTs.
• Mystery Box: By accessing a box full of various surprises, customers have the chance to win exclusive rewards and NFT-related goodies via the mystery box feature.

With 770+ NFTs available, the Binance NFT market has a $42 million daily volume. Users can read our article on investing in NFT tokens for more details.

Read more: Binance Vs Robinhood: Which Crypto Exchange Is Better For You in 2023

Pancakeswap

Swapping

PancakeSwap is an exchange, albeit a decentralized one, and its most basic purpose is trading in BEP-20 tokens. Liquidity providers will be issued LP tokens to enable trading for other BEP tokens. It’s pretty similar to cryptocurrency trading. PancakeSwap is designed for speed and security, allowing users a smooth trading experience.

Farming

PancakeSwap permits the farming of its own native token, CAKE.

The farming feature of PancakeSwap allows users to deposit and lock away their LP tokens in exchange for CAKE tokens.

Addition of liquidity

As the PancakeSwap exchange utilizes the AMM paradigm, traders are able to exchange tokens without order books. To acquire CAKE tokens, one must first increase the liquidity of the exchange.

Choose the token pair you intend to deposit, and then provide liquidity to the exchange. Before adding liquidity to the pool, one must have thorough knowledge of the temporary loss.

Staking – Once you have LP tokens, you must stake them in order to obtain CAKE tokens. You can stake CAKE tokens in SYRUP pools if you possess them. When you stake a CAKE token, you will receive CAKE tokens as rewards.

Lottery

In addition to the swap, stake, and farm, lottery tickets can be purchased with CAKE tokens on PancakeSwap. Each lottery session lasts approximately six hours, a lottery ticket costs approximately ten cupcakes, and it provides a random four-digit combination number between one and fourteen.

To win the jackpot, the four numbers on your ticket must correspond to the numbers in the same order. Even if the numbers do not match, if two or three numbers match, you will receive incentives.

NFTs

An abbreviation for Non-fungible tokens. PancakeSwap’s gamification strategy allows users to win special NFTs, which may subsequently be utilized for trading and staking. Some folks, however, choose to merely collect these NFTs. Binance has created a technology that makes it much easier to generate NFTs than in the past.

Farm Initial Public Offerings (IFOs)

To participate in initial farm offers, you must utilize PancakeSwap tokens to gain access to the sale of newly launched tokens. IFOs are similar to ICOs and IEOs, which we will go over in more detail later.

Read more: IDO Vs ICO Vs IEO: What Is An IDO In Crypto And How To Invest It 2023?

Supported Currencies

Staking, Credit Cards, Other Options

Staking

Binance

With the help of this tool on the Binance exchange, you can get paid for holding a particular cryptocurrency for a predetermined amount of time. A coin like BEL, for instance, might offer a 15-day staking period with, let’s say, a yearly interest rate of 18%.

The staking process comes to an end after those 15 days because activities staking possibilities do not last indefinitely. The activities area of Binance is a good place to look because these deals change every month.

PancakeSwap

Liquidity pools on PancakeSwap are supported by user deposits, and in exchange, users receive Liquidity Provider (LP) tokens, also known as FLIP tokens. These LP tokens may be redeemed for their share and a portion of the transaction fees.

Additionally, PancakeSwap enables users to farm CAKE and SYRUP tokens. The farm allows users to deposit their LP tokens in exchange for CAKE. Then, CAKE tokens can be staked to obtain SYRUP, which has additional utility as a governance token and can be used as lottery tickets in various situations.

CAKE holders receive a fixed amount of CAKE for each constructed block, which can be staked to win rewards. CAKE is issued as BEP20 tokens to those giving liquidity to the network, and by staking CAKE in the pool, users can earn 170 percent APY.

Read more: TOP 20+ Best Staking Coins To Trade & HODL In 2023: A Full Guidance For Crypto Traders

Credit cards

• Binance does not accept credit card payments. This is because crypto exchanges are prohibited from collaborating with institutions that issue credit cards.
• PancakeSwap: Customers of Kriptomat can purchase PancakeSwap for cash using a credit or debit card. In addition, card transactions offer an easy method for entering the bitcoin market.

Other options

Binance

Whether you’re trading Spot, Futures, or Margin, your VIP tier entitles you to fee breaks and other advantages throughout the whole Binance ecosystem. Below are a variety of benefits:

• Over-the-counter (OTC) support for orders of $10,000 and above
• Exclusive Binance APIs with dedicated developer support
• Higher borrowing rate for Margin trading
• Sub-account services exclusive for VIP
• 1-on-1 support from our dedicated VIP account managers
• Gifts and merchandise to celebrate special occasions
• Exclusive annual VIP dinner with the Binance team and partners
• The market-maker program for eligible VIP partners

Pancakeswap

• Pancakeswap trading fee is only 0.25%.
• Pancakeswap has a VIP program that gives you a chance to get up to 50% off on your trading fees.
• Pancakeswap also offers a staking program that gives you a chance to earn rewards for holding your tokens.
• Pancakeswap also has a referral program that gives you a chance to earn rewards for referring new users to the platform.

Security

Binance

SAFU, or secure asset fund for users, is the most effective method through which Binance safeguards your funds. This fund is a part of all fees collected by Binance in the event of a financial loss to their users. Their 2018-implemented SAFU would reimburse users for any Binance-related financial losses.

In addition, Binance offers other security mechanisms, including two-factor authentication, whitelisting of IP addresses, and device restrictions. All of these features make it nearly impossible for anyone else than yourself to access your Binance account!

Besides, Binance has been generally safe and secure with regard to data. Moreover, they reimbursed the losses of its subscribers out of their own pockets, a fact that says volumes about the reliability of their platform.

Pancakeswap

PancakeSwap is an open-source project that has been subjected to numerous security evaluations by Certik, Peckshield, and SlowMist. The official documentation details nine security audits in all.

In addition to implementing multi-signature for all contracts and a time-lock option, PancakeSwap adheres to basic security procedures.

Furthermore, for maximum openness, the majority of PancakeSwap’s code is accessible to the public, and all of their contracts are scanned with BscScan.

Geographic Availability

• Binance is accessible in more than 180 countries including the United States, Canada, Australia, Singapore, and most European countries.
• Pancakeswap is available in over 40 countries such as Australia, Thailand, Canada, the United States, the United Kingdom, South Africa, Singapore, Hong Kong, India, France, Germany, Norway, Sweden, Italy, Denmark, United Arab Emirates, Saudi Arabia, Kuwait, Luxembourg, and Qatar, as well as the majority of other nations.

Fees

Binance

Binance offers a very straightforward and well-organized fee structure. Trading charge rates are classified into ten categories, ranging from VIP level 0 to VIP level 10.

• VIP level 0 customers have a balance of 0 to 50 BNBs and a monthly transaction volume of less than 50 BTC.
• The VIP 9 level is designated for people who have more than 15,000 BTC in monthly transaction volume and/or a balance of at least 11,000 BNB.

Maker fees range from 0.0200% to 0.1000% between VIP 9 and VIP 0, while taker fees range from 0.0400% to 0.1000%. BNB holders are eligible for a 25% trading fee reduction and a 10% reduction in the charge for trading USDS-M future.

Pancakeswap

PancakeSwap’s lower fees compared to other DEXs is one of the key factors that may entice people to use it. The trading fee for exchanging a token on PancakeSwap is 0.25%. Surprisingly, a significant amount of trading fees are refunded to liquidity providers, which encourages them to supply liquidity to the platform.

The transaction charge of 0.25 percent is allocated as follows:

• 0.03% was transferred to the PancakeSwap Treasury.
• CAKE repurchase and burning – 0.05%
• As an incentive for liquidity providers, the return to liquidity pools is 0.17%.

In addition to the above-mentioned costs, keep in mind that certain tokens may impose a “tax” on token transfers or sells.

Read more: Difference Between Maker vs Taker: Top Full Guide In 2023 For Crypto Traders

Ease of Use

Binance

Binance is one of the world’s most user-friendly, transparent, and convenient cryptocurrency exchanges. The Binance.US desktop and web apps are comparable to the global website, but it does not offer all of the global exchange’s capabilities since crypto policy in the United States bans certain features and products.

The following are the top three elements that make Binance.US a user-friendly platform for both newbie and professional traders:

• Quick and simple onboarding – The site allows for a quick onboarding procedure, allowing you to sign up and acquire cryptocurrency in less than 10 minutes. While signing up, a basic sliding verification is utilized to confirm you are not a robot or a computing system.
• Visibility and access – The platform provides multiple degrees of trading screens to investors seeking varying levels of service. These are labeled as Markets, Basic, Advanced, and Over-the-Counter (OTC) in the website’s “Trade” section, which appears as a drop-down while hovering over the Trade section.

Pancakeswap

It is no longer news that PancakeSwap has a user-friendly UI. Many users are overjoyed since the UI is as basic as that of other well-known DEX projects in the industry. Users do not need any prior experience to use the site.

The trading functions are simple to grasp and accomplish for profit. A user can also lend his or her digital assets on the market to contribute to liquidity pools. The returns of liquidity tokens from the loan can then be used in staking to increase earnings.

Interest Rate

• The Binance interest rates are between 2 and 5% per annum. The interest rate is a floating rate and may vary over time.
• Lending rates on PancakeSwap are variable and depend on the amount of CAKE in your lending pool. The more CAKE you have, the higher your lending rate will be. The current average lending rate is about 5%.

Borrowing rates on PancakeSwap are also variable and depend on the amount of CAKE in your borrowing pool. The more CAKE you have, the lower your borrowing rate will be. The current average borrowing rate is about 3%.

At a Glance

FAQs

How Do Binance and PancakeSwap Work?

Binance and Pancakeswap are two decentralized exchanges that allow users to trade cryptocurrencies without having to go through a central authority. Both platforms use smart contracts to facilitate trades, and both allow users to hold their own private keys.

Is It Safe to Hold Cryptocurrency in the Binance or PancakeSwap Exchanges?

There is no one-size-fits-all answer to this question, as the safety of holding cryptocurrency in any exchange depends on a number of factors. However, in general, it is considered safe to hold cryptocurrency in exchanges such as Binance and PancakeSwap, as these exchanges have strong security measures in place to protect user funds.

Who Should Use Binance or PancakeSwap?

Binance and PancakeSwap are both popular cryptocurrency exchanges. They are both suitable for users who want to trade a variety of cryptocurrencies.

Which One Should You Choose?

The answer to this question depends on your needs and preferences. If you are looking for a more traditional exchange with a wide range of features, then Binance is the better choice. However, if you are looking for a decentralized exchange with lower fees and more anonymity, then Pancakeswap is the better choice.

Conclusion

So, which exchange should you choose? Binance or Pancakeswap? Both have their pros and cons, so it really depends on your needs. If you want a wide variety of features and strong security measures, Binance is a great option. If you are looking for an exchange with a large user base and user-friendly interface, Pancakeswap is a great choice.

Disclaimer: The information provided in this article is not investment advice from Cove Markets. Cryptocurrency investment activities are yet to be recognized and protected by the laws in some countries. Cryptocurrencies always contain financial risks.

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