Lecture 4.0.0. Practical Lesson: How to Yield Farm
Pancakeswap is a decentralised exchange for Binance smartchain. Due to its simplicity of application and the many services it provides and coupled with the cheap gas fees and fast speed of transactions, Pancakeswap has grown to be among the top decentralised exchanges in the Crypto Market.
The Cake (shortened name for Pancake) is the utility crypto for Pancakeswap. The most popular liquidity farm on Pancakeswap is BNB-Cake.
For this practical session, we will farm Cake in the BNB-Cake farm of Pancakeswap. The practical session will be divided into four sections, each section leading into the next one as follows:
4.0.1. Fund and Connect Your Wallet
Step 1: Login to your Metamask wallet and fund it by depositing the amount of BNB and Cake tokens that you want to use for yield farming.
To do this, you can send BNB to your Metamask wallet and then use 40 to 45% of the BNB to buy Cake.
Step 2: Click on Pancakeswap website address: pancakeswap.finance.
Step 3: This will automatically prompt you to connect your wallet.
If it does not, you can connect your Metamask Wallet to Pancakeswap by clicking on “Connect Wallet” at the top-right hand corner of the Pancakeswap website.
4.0.2. Generate the Liquidity Pair (LP)
These steps will pair the BNB and Cake into BNB-Cake LP tokens as follows:
Step 4: Click on “Trade”
Step 5: Click on “Add Liquidity” and select the tokens you want to add (in this case, BNB and Cake)
Step 6: Click on “Supply” to Approve Liquidity
Step 7: Approve the “Supply” to obtain the BNB-Cake LP tokens
4.0.3. Deposit the LP in the Farm
After obtaining the BNB-Cake LP tokens, the next phase is to deposit it in the farm as follows:
Step 8: Click on “Farm”
Step 9: Select the correct farm and click on it (in this case the BNB-Cake farm)
Step 10: Click on “Enable Farm” and then the LP token pair and follow the on-screen process
Step 11: Click on staking the LP tokens to start the yield farming of Cakes.
4.0.4. Staking the farm-yielded Cakes
Once you have started to receive cakes from the yield farm, you can stake them in any of the pools, which Pancakeswap named Syrup Pools, so that your Cakes can generate more Cakes for you. The steps are as follows:
Step 11: Click on “Harvest Cakes” from the Farm and follow the on-screen prompt
This will harvest the farm-yielded Cakes and deposit them in your Metamask wallet. These are the Cakes you will stake in a Syrup Pool to yield more Cakes.
Step 12: Click on “Pools.”
Step 12: Select the particular Cake Pool you want.
Often you want to select the Pool that gives good interests such as 100%, 360%, etc.
Step 13: Click on the (+) sign to add the Cakes from your Metamask wallet to the Syrup pool you have selected.
Congrats, you have started yield farming and at the same time staked in a pool.
Three Important Details
(a). Following the above yield farming steps, you would have noticed that at each stage, you are prompted to approve gas fee payment through your Metamask wallet.
The good thing about Binance smartchain is that the gas fees are quite little (less than one dollar) when compared to the ones from the Ethereum smartchain.
(b). Also, you would have realised that some Syrup Pools do have “auto staking.” This means once you get more Cakes, the system will automatically re-stake them back to the Pool, thereby, increasing the number of Cakes you get.
Where such auto-staking is not available, you will need to harvest and then re-stake your generated Cake tokens manually, if you so wish.
(c). You can retrieve to your Metamask wallet your LP tokens and Cakes at any time from the farms and pools by clicking on the (-) sign or “Harvest” sign and follow the on-screen prompts.