How to Yield Farm on Pancakeswap

Yield Farming on PancakeSwap is an opportunity for users to profit from their crypto assets.

Utulu Hope
January 9, 2022
BSC News


Yield farming is one of the oldest concepts in Decentralized Finance (DeFi). Also referred to as liquidity mining or liquidity farming, the concept involves generating income from holding cryptocurrencies. In short, it is a means of locking cryptocurrency assets to get rewards. 

Many compare yield farming to staking, but it involves a more complex setting. In numerous cases, yield farming works with Liquidity Providers (LP) users who add funds (Liquidity Pool Tokens) to Liquidity Pools in permissionless liquidity protocols like PancakeSwap Julswap, ApeSwap, Beefy, and many others. 

Investors/Liquidity providers who stake LP tokens on the protocol can earn massive interest in cryptocurrencies. 

Various DeFi markets, platforms, and incentivized pools allow users to earn rewards for providing LP tokens. With this in mind, we want to look at Yield farming on PancakeSwap Decentralized Exchange (DEX). PancakeSwap is arguably the most significant Yield farming protocol on Binance Smart Chain (BSC) that offers users the chance to Yield farm and earn tokenized rewards. 

Understanding Liquidity Pools

Before we begin the Yield Farming process on PancakeSwap, we need to understand Liquidity Pools. Simply put, “Liquidity pools are pairs of crypto assets.” These crypto-asset pairs are locked by smart contracts, forming an aggregated store of assets pooled together by investors. 

They are an essential feature in the DeFi space, offering critical support structures across different networks. Read our article about Liquidity Pools to learn more. 

Yield Farming on PancakeSwap

This guide will teach you how to yield farm on PancakeSwap DEX and earn CAKE rewards. You will be required to stake two tokens to get LP Tokens, which you will stake in the Farm to earn CAKE rewards. 

Getting Started 

As discussed above, you will need LP tokens to enter a Farm on PancakeSwap. Yield Farms will only accept their own exact LP Token. For instance, the CAKE-BNB Farm will only accept CAKE-BNB LP Tokens. 

To get the correct LP Tokens, you need to provide liquidity for the Liquidity pool/trading pair. Thus, to get CAKE-BNB LP Tokens, you will first provide liquidity for the CAKE-BNB trading pair. First, however, you need to find the best Farm for yourself. 

Finding The Best Farm 

Before providing liquidity, you need to choose the best farm for you. To choose, visit PancakeSwap’s Farm page and pick from a list of available Farms. We will use CAKE-BNB to explain as we proceed. 

CAKE-BNB and BUSD-BNB are the first two Farms on the DEX’s farming page. The page also gives users the chance to sort for Farms based on Liquidity, Annual Percent Rates (APR), Hotlist, Earned, and Multiplier. When you find the best Farm for you, note the trading pair (E.g., CAKE-BNB). 

The First two Farms on PancakeSwap’s Farm Page

Providing Liquidity for LP Tokens 

Take the following steps to add liquidity and get your LP Tokens: 

  • First, click on the Farm row you have selected, you will see more details. 
  • Then, proceed to the left-hand side and click the “Get (trading pair) LP” link. E.g., Get CAKE-BNB LP, as seen in the image below. 

  • The Add Liquidity page will display after clicking the link. Next, read PancakeSwap Guide on adding liquidity and receiving LP Tokens. 

Putting LP Tokens into a Farm 

After adding liquidity, you will be given your LP Tokens to stake them in a Farm and earn rewards. Here is how it works: 

  • Locate your Farm by visiting the Farm Page once again. Click on the Farm row to show more details. Then, click the Enable button on the right-hand side and confirm the action in your wallet. 
  • After a short while, the Enable button will change to STAKE LP. Click it to open a new window. 
  • Type the amount of LP Tokens you want to farm into the area, or click max to use all your LP Tokens. 
  • After entering the amount, click on the confirm button. Then, again, confirm the action in your wallet. 
  • Wait for a short while to view your new staked LP Token balance in the details section of the Farm row. 

You can also unstake your LP tokens. Learn how to unstake LP Tokens through the PancakeSwap document. 

Harvesting Your Rewards

You will earn CAKE rewards over time from Farming. You can use these rewards to get more LP Tokens, used in Syrup Pools, play the lottery, and many more. 

To collect your Farming rewards, go back to the Farms page and select your chosen Farm row to see the estimate of your rewards under “CAKE earned.”

What is PancakeSwap?

PancakeSwap is a Decentralized Exchange (DEX) built on BSC. It offers various features such as Liquidity Pools, Swapping, Yield Farming, Syrup Pools, Automated Market Maker, Initial Farm Offering (IFO), Non-fungible Token (NFT)  profile system, and many others. 

In addition, the protocol helps users make the most of their crypto assets by trading, earning through yield farming, and winning via lottery, prediction, and NFT collectibles. With the highest trading volumes in the market, PancakeSwap is the leading DEX on the BSC. 

Where to find PancakeSwap

Website | Twitter | Medium | Github

Utulu Hope

UC Hope is a passionate fan of crypto who could weave the latest event into sparks of inspiration and information. He leaves no stone unturned to get to the core of a story. Aside from writing, he spends his hours poring over algorithms and protocols, preparing for a future career as a computer programmer. He hodls mostly in Ethereum, BNB, and, Avax.

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