Updated: Sep 30, 2021
Coin of the month is a new series where I highlight a cryptocurrency that deserves attention. As always, do your own due diligence before making any investments.
What is CAKE?
$CAKE is the native token of the PancakeSwap exchange. For those unfamiliar, PancakeSwap is a Decentralized Exchange built on the Binance Smart Chain.
Who are CAKE's competitors?
DEX tokens like UNI, SUSHI, RUNE are CAKE's main competitors.
If you read my post about crypto trends in 2021, you know that Decentralized Exchanges are one of the safest bets that you can make in crypto this year. That being said, CAKE currently sits in a great position for future price appreciation.
Here are a few things CAKE has going for it:
Receiving funding from Binance
Binance Chain's #1 AMM (Automated Market Maker)
$6 billion locked in ecosystem (as of 3/29/2021)
At the time I'm writing this, Uniswap has $4.3 billion locked in their platform
Uniswap's UNI token is ranked #8 by market cap
CAKE currently sits at #44 market cap even though it has more value locked
Other features on roadmap:
Lending & Borrowing
Uniswap has traditionally been the king of DEXs, however that has been changing lately due to the continuing high fees on Ethereum. Exchanges like Uniswap, Sushiswap, 1inch, and others built on Ethereum are borderline unusable at the moment because fees can spike up above $100 depending on the congestion of the ETH network. This is causing people to seek alternative DEXs to trade on.
With BNB sitting at #3 in market cap, Binance Smart Chain is the second-largest smart contract platform behind only Ethereum. BSC does not have the same fee issues as Ethereum because it was built using Proof of Stake. PancakeSwap is the #1 DEX built on BSC, does more volume than Uniswap, and is somehow still ranked much lower than UNI in terms of market cap. All of these factors put CAKE in a unique position to where it can capture a large market share in the short-mid term with relatively little competition.