Pancake Bunny is a decentralized finance (DeFi) application that works as a yield aggregator on the Binance Smart Chain (BSC). The platform became very popular in recent weeks and the $BUNNY cryptocurrency is now among the fastest-growing digital assets in the DeFi market.
In this guide, we share with you what Pancake Bunny is, how it works and the things you should take into consideration about it.
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Pancake Bunny is a platform that allows users to earn the highest interest on their virtual currencies using DeFi platforms. This protocol works with the $BUNNY cryptocurrency that became an important part of the platform.
The platform is specifically used for PancakeSwap, another recognized DeFi platform that runs on top of the Binance Smart Chain (BSC). In these DeFi platforms, users are searching for the best farms in order to maximize their yield. In this way, users can optimize their compounding strategy.
While the latest DeFi platforms are very useful to find high yield farms, it becomes very difficult to have an automatic compounding strategy. This is why Pancake Bunny makes it possible for users to maximize their strategies and reducing risk.
Yield Farming or farms are a relatively new way to generate income with your virtual currencies. In order to do so, users lend their funds using smart contracts. In order to participate in farms, users have to lend their funds to liquidity pools.
Liquidity pools than give you LP tokens that can be staked on farms, specifically the farm linked to the liquidity pool you use. You will get rewarded with the fees paid by crypto traders that take liquidity from the pool where you deposited funds.
Farmers are all the time trying to maximize their yields. This can be done on a regular basis in order to always have a high return on their investment and funds. One thing is clear, the more people know about these strategies, the less effective and efficient they become.
There are some risks involved in using Pancake Bunny. One of the things you should take into consideration (in any DeFi platform) is that when you deposit your funds on a specific liquidity pool, the coins you used could lose dollar value.
For example, if we deposited BNB and BUSD, we have the risk that when we deposited BNB the price of this coin was $500 and a few days later (when we want to withdraw it) it was $300. The BUSD part would remain stable considering its price does not fluctuate.
Another risk is related to the fact that smart contracts could fail. In some cases, some smart contracts could end up being attacked or exploited by hackers. This is why you should use these types of platforms with care and being conscious of the risks.
The project is audited by Haechi Labs. This company considers that there are no critical issues. Thus, the platform has been already checked and fully audited. Nonetheless, there were two minor issues that are worth mentioning: intended behaviour and governance tokens issues.
Each DeFi protocol has its own digital asset that is rewarded to users by completing different activities. The BUNNY digital asset is the native token to the Pancake Bunny platform and it can be traded using the swap option on the PancakeSwap decentralized exchange.
Over the last few months, the virtual currency moved from $5 to over $400. This positive trend remained for several months and does not seem to be ending in the near future. However, these types of protocols are very new and could face several security issues.
Moreover, users can stake their BUNNY tokens and get rewarded. The token is also used for governing decisions on the platform. Users can stake their tokens into the BUNNY governance pool and earn rewards.
In the near future, the platform could launch the new governing features. In this way, the community will have a larger impact on the project and on how the platform works. BUNNY loves should take into account that there are other projects expanding in the market and Pancake Bunny could lose some of its users.
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