Yes really. In the brave bold world of crypto, pancake swaps are now a thing.
A close collaborator drew my attention to them having recently worked on an associated project. I still don’t really understand them. They’re part of the Defi phenomenon, which I’ve tried to ignore as much as possible because the whole thing hurts my head. But news of compounded pancake sushi swaps is to enticing to ignore.
So far responses to my inquiries about how these things work look and feel like financial parody:
A pancakeswap is a fork of uniswap that got big. When eth was young people bought sushi for staking at high yields. But then the rise in gas fees made staking expensive inside of ethereum ecosystem. Pancakeswap lives in BSC, ie binance. It’s centralised so they control their costs and don’t have to incentivise liquidity providers. So CAKE which at one time was yielding 80-90% was the best coin for stakers. Look at this, me compounding my day’s interest. For my 400 odd cake I have earned 1.7 cake. In about two days. I compound that. It costs me: 41 cents. I’ve compounded sushi swap in ethereum wallets and the gas fee quoted is upwards of $25. So, no point compounding but then if you don’t compound all the time, frictionlessly you don’t ever get the 1000% apy’s. Not really much to it, it’s uniswap-esque yields without high fees. Although, cake was $40 and now is $7 so if I sold today I’d make a loss.
I can’t help wondering how much of this is going to withstand FCA scrutiny?