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Building Passive Income on Pancakeswap Finance: Farming CAKE-BNB LP

**It was February 10, 2021, when I started my Farming journey on Pancakeswap because I got curious and felt the fear of missing out on this great opportunity on building passive income in the crypto-verse.** To those who don't know: *"PancakeSwap is a new Automated Market Maker (AMM) aiming to be the #1 liquidity provider on Binance Smart Chain. You gain CAKE tokens by providing liquidity to the platform, staking, and also get a chance to win some CAKE tokens through a lottery."* As I first shared in **My Pancakeswap Journey: Flipping TWT, EGLD, REEF, and BNB,** I farmed the TWT-BNB, EGLD-BNB, and REEF-BNB LPs I received by providing liquidity to the liquidity pool. https://read.cash/@Eirolfeam2/my-pancakeswap-journey-flipping-twt-egld-reef-and-bnb-cb6d3238 My initial investment was **99.50 TWT** that I got from the Binance airdrop, **1.294 EGLD** which I bought at a total value of **$250**, and **3,636 REEF** which cost about **$100**. In providing liquidity, we have to have enough BNB or the other pair that has the exact value of the tokens we plan to farm. With my tokens, I needed about **3.5 to 4 BNB** to provide liquidity. (I can't remember the exact amount of BNB I used in providing liquidity but it ranges from 3-4. Good thing I bought each BNB at around **$36.20** for a total of **$144.80** before it pumped to the moon.) Overall, I spent more or less **$500** for this Farming Journey on Pancakeswap. Today, I have decided to unstake my LP Tokens and get back my initial coins. At some point, I think that it was a wrong move because the market is bloody when I removed the tokens from the liquidity pool. Well, everything is already done so there's no point in regretting it now.

When I unstaked my LP Tokens, these are the coins that I received. From **1.294 EGLD**, it became **2.13 EGLD**. From **3,636 REEF**, it became **4,821.62 REEF**. From **99.50 TWT**, it became **224.70 TWT**. However, from **3.5-4 BNB**, I only received **2.27 BNB** (which is not included in the screenshot because I immediately farmed it with my CAKE). How is this so? I think this is now the so-called "Impermanent Loss". Based on my own understanding, when you provide liquidity and sadly, the other coin's price dumps, the other coin will be used to buy back the coin that was dumped. This means that my BNB was used to buy back the other coins, which resulted in more holdings of EGLD, TWT, and REEF. I don't have issues with it because I believe that these coins will also pump in price in the future. Now, after almost 2 months of farming these LP Tokens, I was able to earn a total of **15.65 CAKE**, which is now valued at about **$250** at its price of **$16** each. This is not bad at all because I didn't do anything to earn it. I just let my coins sit there and do their work. The reason why I unstaked my LP Tokens is that I wanted to try other opportunities that have better returns or APR compared to the previous ones. Having said that, I decided to stake my CAKE-BNB LP on Pancakeswap. This time, the investment is smaller but I'm planning to add a little more in the coming days.

With my **6.221 CAKE-BNB LP** that is currently staked or farmed on Pancakeswap, my initial investment is **28.70 CAKE** where **13.05** of it was bought at the price of **$7** each and the rest came from my earnings in farming, and **1.73 BNB** that I got back from my previous LP Tokens. In total, I spent around **$236.43** on this farming journey based on the price that I bought the Cake and Bnb. After 5 hours of farming, I already earned **0.033 CAKE**. If my computation is correct and the APR won't change over the month, I will be able to earn **4-5 CAKE** before April ends. As part of my monthly passive income, I will monitor this for a month and see if I will be able to tick my goal which is to earn about **$400 to $600** in passive income alone. If you are planning to farm LP Tokens on Pancakeswap, too, just read this article. https://community.trustwallet.com/t/how-to-earn-farm-and-stake-cake-on-pancakeswap-with-trust-wallet/70964 I am not good at teaching so just click the link above and read the whole article. 🤣 **Happy Farming and Staking, everybody!**

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