PancakeSwap is one of the largest Decentralized Exchanges (DEX) on the bnb chain. It has amassed a total of 3 billion USD in liquidity and has over 200m USD of trades a day as of writing this article (Source: pancakeswap.finance/info). But is PancakeSwap a scam?

PancakeSwap was created by an anonymous team. This team still runs and manages the PancakeSwap contracts. Anonymous projects are a controversy in Crypto. Many investors believe that projects that are run anonymously are more likely to be scams. However, many investors and project developers fear regulation and thus created their project anonymously.

PancakeSwap’s code has the capacity to perform a so called “rug-pull". This has been a huge controversy and topic of discussion. The code in question is referred to as the “migrator code”. This code is also commonly used for upgradeability of smart-contracts. Meaning that it can be used to update/optimize features in a smart-contract. The team claimed this to be their reason. Nonetheless, the code allows PancakeSwap to withdraw all their community’s money within 6 hours.

Time and money factor

PancakeSwap was launched 2 years ago, and has billions of dollars behind it today. Typically this makes investors feel safer, as the more money is behind a project, the more eyes are on it. It has also open-sourced it’s code and received a listing on Binance which are very good signs for cryptocurrencies. They have enhanced their business model by partnering up with many other projects in the industry.

PancakeSwap has a long-established large community and hasproven itself to be the dominant DEX on the bnb chain.

The Cake Token

PancakeSwap’s CAKE token was created as a reward token to the liquidity providers in their community. The inflation of the token is controlled by the community and has gained a lot of utility through it’s partnerships with other projects. Yet the value of the token has seen a steady decline since may of 2021.

Conclusion

PancakeSwap should not be considered a safe investment. Whilst PancakeSwap has proven through time not to be a scam, nothing is guaranteed and you should always DYOR. We believe that PancakeSwap’s value is just being scratched as the entire Binance ecosystem develops further. PancakeSwap’s governance is being developed further, making it safer and safer with time as the project’s team relinquishes power to the community and as more utility comes out for PancakeSwap.