Have you come across a step that requires you to “Enable token” when you try to swap tokens on PancakeSwap? This is essentially a token approval request on PancakeSwap—requiring you to grant the decentralised exchange (DEX) platform access to tokens in your non-custodial wallet.
From the PancakeSwap Trade page, you can choose the token and amount you wish to swap. However, you first need to enable the token, if it is your first time swapping it on this DEX platform.
Get to know what Enabling a Token on PancakeSwap means, when you are required to enable a token and how to enable a token on PancakeSwap.
What does ‘Enable Token on Pancakeswap’ Mean?
Enable a token on PancakeSwap means granting the DEX platform access to that particular token in your smart wallet. This is why you’ll be required to confirm this action from your linked non-custodial wallet, such as Krystal app or MetaMask.
Only after you have enabled a token on PancakeSwap will the Swap Button appear. Just as is the case with other blockchain actions, enabling a token on PancakeSwap is considered to be a transaction—hence will incur gas fees.
Why Do I Need to Enable a Token on PancakeSwap?
PancakeSwap uses the automated market maker (AMM) protocol to automate the trading process and eliminate the need for a third party. Rather than using order books to match trades, the AMM system applies smart contracts to price tokens as well as provide liquidity.
A good example of this in action is when you are depositing tokens to PancakeSwap. In such a case, the tokens will be locked by a smart contract then made available for trading in your PancakeSwap liquidity pool. To complete such a transaction, the smart contract needs to access your crypto wallet.
Thanks to industry standard protocol assertions, a smart contract cannot access tokens in your non-custodial wallet unless you grant it the permission to do that. This is essentially why PancakeSwap requires your approval. In other words, you have to enable a token on PancakeSwap for that smart contract to access your tokens and trade your assets.
By enabling a token, you are allowing the PancakeSwap smart contract the permission to access funds in your crypto wallet.
What Smart Contracts Require You to Enable Tokens on PancakeSwap?
A smart contract is a program that has been designed to automatically implement an agreement (transaction)—once specific conditions have been met. For example, a seller and buyer may agree may agree to exchange a specific quantity of merchandise at a specific price.
In such a case, they can enter into an agreement that specify those terms. Once the seller has provided the buyer with the merchandise, the smart contract will be triggered to transfer funds to the seller’s account.
On PancakeSwap different contracts need to be approved. One of the PancakeSwap transactions that require token approval is making a token swap.
- Swapping Tokens
To add liquidity, you need to increase your token balance on the DEX platform. This means that you need to swap the tokens you have in your wallet for the desired tokens on PancakeSwap.
For the platform to complete such a transaction, you will be required to enable the token at some point, as illustrated below. The following procedure will help you swap the tokens in your wallet for PancakeSwap tokens:
ere is how you should go about it:
- Navigate to the PancakeSwap homepage on your browser, expand the Trading drop-down menu, and select Liquidity
- Click on the blue Add Liquidity button then choose the type and number of tokens you want to spend and the tokens you wish to receive on PancakeSwap.
- Now you should click on the blue Enable button towards the bottom of the screen. This will give the smart contract the approval it needs to draw tokens from your crypto wallet.
- Next, you can select Confirm on the pop-up prompt you get from your wallet to authorise this action.
- Finally, you need to select Delivery then confirm the operating from your crypto wallet.
At this point, you should be able to see your liquidity (LP) token balance towards the bottom of the screen. You may now proceed to execute the smart contract that adds your liquidity to PancakeSwap. To do this, just click on the Submit button.
Conclusion
Enabling tokens on PancakeSwap is simply giving the DEX platform token approval to access and move tokens in your smart wallet. Running on the AMM protocol, smart contracts on this platform are designed to automate transactions once certain conditions are met.
However, the contracts are unable to access and move tokens from your crypto wallet without your consent. To gain this approval, PancakeSwap requires you to enable the token you want to swap.
The good news is that you’re just required to do this once per token!
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