Listing on PancakeSwap – how to set up a pool and add liquidity

PancakeSwap listing seems to be as easy as making pancakes. But a good recipe, which you are probably looking for right now, does not guarantee success. Have you ever burned your pancakes? Imagine that token issuers often burn their money by falling victim to bot attacks while setting up the pool. Or they add liquidity without knowing how to manage the concentration range. Impermanent loss means that you cannot serve all your tokens to investors right now without losing money.

You are on your own when it comes to frying pancakes, but we know liquidity pools’ mechanisms inside out and can help you in this field. To list your token on PancakeSwap, you can follow the steps in this article. But I also invite you to use our expertise. Contact us. Consultations are free, as the whole DeFi should be.

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About the PancakeSwap exchange

PancakeSwap with its 4 million users, is the most popular decentralized exchange working on BNB Smart Chain. The exchange is ranked 6. by CoinGecko and 8. by CoinMarketCap in terms of trading volumes. PancakeSwap focuses on BEP20 tokens – a specific token standard developed by Binance.

At the time of writing this article, June 2024, according to CoinGecko, there are 490 coins and 1215 trading pairs available on the exchange. Pancakeswap V3 (BSC) ‘s 24-hour volume is reported to be $396,394,761.46.

How to list a coin on PancakeSwap?

Listing a token on PancakeSwap doesn’t require permission from PancakeSwap itself. You can list any BEP-20 token by adding liquidity to a liquidity pool. However, the following tokens are currently unsupported: Fee-on-transfer tokens and Rebase tokens.

You can successfully set up a liquidity pool and determine the initial price for your token on PancakeSwap by following the below steps.

Step 1: Get BEP20 tokens

To perform transactions on Binance Smart Chain (BSC), you need BEP20 BNB for gas fees and the BEP20 version of the token you want to trade or stake. You can convert your tokens to BEP20 using various methods outlined in the PancakeSwap documentation here.

Step 2: Connect your wallet

Connect your crypto wallet to PancakeSwap. This will enable you to interact with the platform and manage your liquidity pools. MetaMask and Trust Wallet are the most popular choices. How to connect your wallet?

Access PancakeSwap: Go to the PancakeSwap website.
Connect Your Wallet: Click the “Connect Wallet” button in the top right corner. If you don’t have a wallet yet, you can learn how to install one here. Popular options include MetaMask and Trust Wallet.

Step 3: Set up the pool

Create a liquidity pool for your token by selecting a token pair and initializing the pool. This involves setting a starting price and defining the price range. How to do this?

Go to Liquidity Page: Navigate to the “Liquidity” section under “Trade”.
Click on “+ Add Liquidity”.

PancakeSwap listing add liquidity

Choose the two tokens for your trading pair. Using the top left input, choose the two tokens in the trading pair you want to create a pool for – select from the list or use the search. For better understanding, we will use “$YourToken” as the example token name.

Listing PancakeSwap - price range

Select V3LP trading fee level for $YourToken pool – choose from 0,01%, 0,05%, 0.25%, 1%, marked as “not created” yet.

Listing on PancakeSwap - selecting token pair

Initialize the pool: If the pool doesn’t exist, you need to set a starting price. Your pool must be initialized before you can add liquidity. For example, setting a starting price of 120 means 1 BNB = 120 of $YourToken.

Set Up price range: adjust the % range level, Min. Price, and Max. Price. You can also use the “Full Range” option to customize the price range. Simply click the + and – buttons on the two prices, or click the two price numbers and enter them manually.
Enter deposit amount: specify the amount of BNB and $YourToken to deposit. Note that you can deposit two tokens in your trading pair only if the current price is in the max and min range. price. Otherwise, one of the fields will be marked gray and unavailable.

PancakeSwap deposits

Confirm the transaction in your wallet.

Gas fee and adding more liquidity

Gas Fees: Gas fees will be higher during the initialization transaction.
Earn Fees: Your position will earn fees once the market price moves into your specified range.
Additional Liquidity: After initialization, anyone can add liquidity by reviewing and confirming the price range.

Review your liquidity

After adding liquidity, you will receive liquidity provider (LP) tokens, representing your share of the liquidity pool. Your liquidity will be visible on the “Liquidity Page” under “Your Liquidity,” as in the example image below.

PancakeSwap listing - liquidity

Sniping bot attacks during listing

When listing on DEXes like PancakeSwap, token projects can become easy targets for sniping attacks in the process of setting up a pool. Sniper bots monitor the blockchain, looking for pool creation blocks, and try to enter between pool creation and the first liquidity mint, changing the initialization price. With the changed initialization price, they are able to buy part of the token treasury at a low price with the intention of dumping it shortly after. That leads to losses incurred by a token project or an initial liquidity provider.

The second consequence of a sniper attack is significant initial price volatility. It disrupts the natural price discovery process and records prices that do not accurately reflect the market’s perception of the token’s value, giving misleading signals to investors who may associate the token with a higher level of risk and instability.

At Empirica, we have developed a tool to mitigate the risk of a sniper attack during the pool creation process. Schedule a call with us to discuss this topic before listing your token.

Schedule a call to learn more about sniping attacks

Ensure that PancakeSwap is a good exchange to list on

If you’re new to the world of decentralized exchanges (DEXs), choosing the right one to list on can be overwhelming. But don’t worry, I’m here to help.

Firstly, you’ll want to check out the fees. Nobody likes paying fees, so it’s important to find a DEX that offers transparent information about its fees. Avoid any platforms that don’t provide clear information.

Next up is security. While your funds aren’t held by the exchange, you want to make sure the DEX you choose takes security seriously. Look for a platform that uses the latest and most reliable security software.

Make sure the DEX supports the coins you want to trade. If you’re interested in exploring new assets, choose a platform with a broad range of cryptocurrencies. But if you prefer to stick with the tried and tested assets, any of the top five exchanges should suffice.

Consider the payment methods supported by the DEX. It’s important to be able to buy crypto using a convenient payment method, especially if you’re new to the game. So, look for a DEX that supports your preferred payment method.

Don’t overlook customer service. Having someone helpful and responsive on the other end of the line can make all the difference when things go wrong.

Finally, read customer reviews. Search for “best decentralized exchange Reddit” to find discussions among crypto enthusiasts who have tried and tested various exchanges and chosen the best one for their needs.

By paying attention to these key factors, you can make an informed decision and avoid any unwanted surprises.

How does Empirica help its clients?

Today’s listing requires a comprehensive approach, and our services include extensive support in this area. We are a liquidity provider that specializes in DEXes. We have significantly invested in tools supporting safe listing on decentralized exchanges, automating range adjustments and implementing effective position hedging. By doing so, we support listing and we ensure liquidity with minimal slippage, requiring relatively less capital and, notably, without charging you fees for our service. All we need is a loan in your tokens, which Empirica utilizes entirely to provide liquidity to your investors.

Active management of concentrated liquidity

While many tokens try to provide liquidity to their pools, it often results in inefficient capital usage or considerable losses. We support tokens by providing continuous liquidity provision maintaining a minimal slippage and ensuring uninterrupted trading opportunities for investors.

Piotr explains how we work. Learn what is the difference between passive and active management of concentrated liquidity on DEX platforms. Piotr demonstrates how we manage token liquidity with efficient use of capital achieving the same results with less burden on token project’s treasury.

Enjoy the video!

Algorithmic market-making process

One of the most challenging aspects of listing your token on multiple exchanges is maintaining a consistent price across all platforms. If the price varies significantly, arbitrage opportunities can arise, which could lead to a decline in your token’s value and harm your community and brand reputation. To prevent this, we can implement algorithmic mechanisms that keep the price stable across all exchanges, ensuring that you maintain the trust of your investors.

Designing and implementing hedging strategies

In DeFi, there is a risk known as impermanent loss, which occurs when the price of deposited assets changes from the time they were deposited. When you invest a large sum of money in a liquidity pool, you are exposed to potential financial loss. However, with proper hedging strategies, it’s possible to minimize the risk of impermanent loss and reduce the likelihood of losing money on liquidity pools.

Advising on pool size

Liquidity pools are an essential part of DeFi, enabling efficient and decentralized trading without requiring centralized intermediaries. Properly designing the liquidity pool value is crucial to a successful launch, as it determines the amount of deep liquidity you’ll need. Without liquidity pools, DeFi would struggle to achieve the liquidity necessary for a thriving ecosystem. To avoid stress during the listing, we can provide guidance on the optimal size for your pools.

Risks mitigation

Sniping attacks can exploit weaknesses in the token listing process. The prevalence of sniper bots can discourage retail traders from participating in token listings. Knowing that bots have an advantage in quickly acquiring new tokens may lead to a perception of an unfair and less inclusive market. We have have developed tools and solutions to protects our partners against these attacks.

Insights from our example projects

Token listing that we supported simultaneously on three exchanges as the sole market maker

One of our clients is a mature token project with a global recognition listed on over 30 markets with significant trading volumes. It has a large and active community. The price increased up to 250% within the first week after listing, and remains stable after the first month. Since the listing, volumes have begun to rise significantly, reflecting a healthy market and good trading conditions (see the Price and Volume chart below).

Ensuring liquidity and stabilizing price across different centralized and decentralized exchanges

When we started our cooperation, the token had a pool with almost no volumes there. Prior to our entry into this market, price volatility reached 165% and there was almost no depth! The stabilization of prices (with a maximum volatility of 9%) was reflected in an increase in volume. Our role was not only to drive the expansion on DEXes but also increase liquidity on a few chosen centralized exchanges.

Schedule a call to get help in listing and liquidity management on PancakeSwap

Bottom Line

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See you in the next article!

Listing on PancakeSwap – how to set up a pool and add liquidity

About the PancakeSwap exchange