BakeryToken (BAKE) and the BakerySwap NFT Marketplace

What Is BakerySwap?

Similar to the popular Uniswap platform, BakerySwap is both an automated market maker (AMM) and a decentralized exchange (DEX). However, unlike Ethereum-based Uniswap, BakerySwap lives on the Binance Smart Chain (BSC). The BSC is a blockchain network that runs parallel to the Binance Chain (BC), which was launched in 2018 to support high-speed data transmission and 24-hour trading volume on the Binance crypto exchange. In September 2020, BSC was launched with smart contract functionality, introducing an interoperable alternative to Ethereum.

Although BakerySwap is a DEX at its core, users can also participate in staking to farm BakeryToken (BAKE) and purchase or mint non-fungible tokens (NFTs) through the BakerySwap NFT Marketplace and Bakery Gallery. Before delving into what BakerySwap can do, it’s helpful to understand its underlying infrastructure and how it supports each of these activities.

BakerySwap Automated Market Maker (AMM)

The majority of centralized crypto exchanges (CEXs) use order books to match buyers and sellers. This practice improves market liquidity because it provides an aggregate view of all active buy and seller orders for a particular asset. Although some DEXs also use order books, many others integrate an automated market maker. These AMM protocols provide constant feedback on the price between two assets using what’s called the constant product formula, an algorithm that maintains a balance between assets in a platform’s token reserves. This formula is similar to those used on Uniswap, and the more complex alternatives like those employed on Curve and Balancer.

Independent of the specific formula, AMMs allow users to trade assets without an intermediary, which means transactions occur in a “trustless” environment. This infrastructure employs liquidity pools — crowdsourced pools of cryptocurrencies or tokens locked in smart contracts that facilitate trades between the assets.

BakerySwap Liquidity Pools

Any BakerySwap user can become a market maker by depositing funds into a supported liquidity pool. In exchange for becoming a liquidity provider (LP), users earn rewards from platform transaction fees for token exchanges. Like Uniswap, BakerySwap LPs deposit two tokens of equivalent value, such as 50% Binance Coin (BNB) and 50% ether (ETH), into the protocol. The more liquidity put into a pool, the lower the chances of slippage on large orders. This desirable dynamic can attract more interest in the platform, which results in even greater liquidity.

On BakerySwap, every trade is subject to a 0.30% fee, of which 0.25% goes to the LPs. The remaining 0.05% is converted to BAKE tokens, which are issued as rewards to existing BAKE crypto holders.

What Is the BakeryToken (BAKE)?

BAKE is the native BEP-20 BakerySwap governance token that facilitates protocol voting decisions. Just as ERC-20 tokens are unique to the Ethereum blockchain, BEP-20 tokens are specific to the BSC. In addition to earning BAKE crypto rewards as a liquidity provider, users can farm BAKE by staking in distinct BEP-20 liquidity pools or purchase it on exchanges like BakerySwap, PancakeSwap, or Binance. BAKE holders can participate in protocol governance voting.

Farming BAKE Tokens

We can break down the process of farming BAKE tokens into two main steps:

1. Provide liquidity to one of the pools to receive BakerySwap liquidity pool (BLP) tokens. For example, if a user provides liquidity to the ETH-BNB liquidity pool, they will receive ETH-BNB BLP tokens.

2. Stake the resulting BLP tokens to receive BAKE tokens.

The BakerySwap platform issues BAKE crypto staking rewards differently depending on the liquidity pool chosen. As of 2021, BakerySwap users can farm BAKE in the following bakery-themed liquidity pools:

• Bread: Stake BAKE to earn BAKE

• Doughnut: Stake BAKE-BNB BLP to earn BAKE

• Waffle: Stake BAKE-BUSD BLP to earn BAKE

• Croissant: Stake BAKE-DOT BLP to earn BAKE

• Latte: Stake USDT-BUSD BLP to earn BAKE

• Toast: Stake ETH-BNB BLP to earn BAKE

• Cake: Stake BTC-BNB BLP to earn BAKE

• Pet Food: Stake PET-BAKE BLP to earn BAKE

In addition to these liquidity pools, there are also non-bakery-specific options. The BakerySwap platform also allows users to stake their BAKE crypto tokens to earn alternative BEP-20 tokens, including TLM, TSA, TKO, and xDitto.

BakerySwap NFT Marketplace

In addition to serving as a DEX and staking protocol, BakerySwap has expanded to offer an NFT marketplace. This functionality makes it the first AMM and NFT exchange on the BSC. Users can access this marketplace through version two (V2) of the protocol, where you can purchase NFTs or mint your own. To make this process fairer, BakerySwap integrates a bidding feature that allows NFT creators to customize the parameters of the sale.

BakerySwap Launchpad

Like Binance Launchpad, BakerySwap Launchpad provides users with access to newly launched projects on the BSC. However, unlike the utility tokens available on Binance Launchpad, BakerySwap Launchpad issues NFTs. Since BakerySwap is a DEX, the issuing of NFTs via this mechanism is known as an Initial DEX Offering (IDO). The first IDO to occur via the platform was for the Battle Pets, a blockchain-based game that allows players to breed, exchange, and battle their NFT pets on the BSC.

The Bakery Gallery

Launched in April 2021, Bakery Gallery functions similarly to the BakerySwap NFT Marketplace. The primary difference, however, is that the marketplace is “open,” and the gallery is curated or “closed.” BakerySwap developers describe Bakery Galley as an NFT issuance platform meant to compete with top-quality Ethereum-based projects by appealing to sophisticated collectors and investors.

Bakery Gallery consists of three main sections:

• Upcoming drops: Information on forthcoming NFT drops

• Featured artists: Profiles of curated Bakery Gallery artists

• Artworks: Same features seen on the NFT Supermarket

The platform aims to provide artists with more exposure and attract top talent to BSC via the NFT drop process.

BakerySwap and the Growing BAKE Crypto Ecosystem

The BSC ecosystem has seen considerable growth in a short period, leading to the rapid growth of compatible platforms like BakerySwap. As more users enter the BSC ecosystem, BakerySwap will likely become more prominent. Whether users want to exchange their BEP-20 tokens, earn passive income through staking, farm BAKE tokens, or purchase and sell NFTs, BakerySwap has a solution.