PancakeSwap

Pancakeswap — usually the first DAPP that most new DeFi participants interact with, is actually a very weird one for us to rate.  From a purely code perspective, it actually has the migrator function inherited from Sushi that many other projects afterwards began to use to hard rug afterwards.  This is behind a timelock, so normally this type of project would be a RED or at best ORANGE risk project.  But — it is  one of the very few projects we have highlighted as GREEN due to a variety of factors:

1. Operational history — one of the first dapps deployed on Binance Smart Chain, at the time the entire DeFi ecosystem had no qualms about the migrator code, and Pancakeswap just forked battle-tested and solid code in this manner.  Since then, they’ve shown that they are not going to use the function, even when it would make the most sense to…. for example their upgrade from V1 to V2 of their LP’s.
2.  Binance-affiliated — They’re both backed by Binance and part of their core founding team are ex-Binance employees.  When people know who you are and where to find you, the chances you’re going to hard rug go down
3. Market leader in DeFi — As of June 7, 2021, Pancakeswap has 338,113 unique users in the last 24 hours and $6.9 Billion in assets locked up in their platform.  Its’ closest competitor, Uniswap has nearly 7X less users with only 49,333 unique users and $5.8 Billion in assets locked up.  There is more activity on Pancakeswap’s Router contract than the ENTIRETY of Ethereum on most days.
4. Lack of economic incentive — The amount of money Pancakeswap makes legally in swap fees is eye-watering.  Just like how Binance makes an insane amount of money by collecting fees on trades no matter which direction the market goes, Pancakeswap earns hundreds of millions in profits LEGALLY as is.  If they were to hard rug, there is simply nowhere for them to go with nearly $7 billion in funds except through Binance, which obviously is not going to just let those funds leave the ecosystem.  With a timelock too, you can bet that there are LOTS of people monitoring it, and so if it is called, you can be sure that Binance and other entities will be aware that it will be executing at some point.  Therefore, your only escape route is using 3rd party bridges, which might net you ~$50-100 million max, but as mentioned before…. this is literally less money than they can make legally just operating and doing their core business.
5. Insurance — Due to extremely strong profits plus Binance backing as the core DAPP in DeFi, any type of exploit that lead to some user financial loss would almost certainly be covered by them.  For most projects, a $30 million exploit is the end of their project, as there’s no way they could ever pay it back.  Pancakeswap is one of the few that could easily afford that kind of hit to their treasury.

All in all, DeFi is never 100% safe — but in the spectrum of all the points above, the likelihood that you will lose 100% of the funds you put into a Pancakeswap farm is as low as you’re going to get in the space.