PancakeSwap is a decentralized exchange (DEX) built on the Binance Smart Chain (BSC) that allows users to trade cryptocurrencies without the need for a central authority. It operates using an automated market maker (AMM) model, where users provide liquidity by depositing tokens into liquidity pools and earn rewards in return. In addition to trading, PancakeSwap offers various features such as yield farming, where users can stake their tokens to earn additional rewards, and a lottery system for users to win prizes. It is known for its low transaction fees and fast processing times compared to other exchanges.