Just as the world is evolving, the crypto world is also expanding, with more users adding up every day at a very high rate. Diverse platforms are now introduced to the crypto community, some of which include PancakeSwap and Uniswap.
So, in this article, we will be exploring the Uniswap and PancakeSwap platforms, highlighting key distinctions, determining a few differences between both platforms regarding services and other parameters that make both stand unique.
What is PancakeSwap (Cake)?
PancakeSwap is a distributed exchange platform (DEX) that runs on Binance Smart Chain, somewhat similar to Uniswap, but offers many features other than Uniswap's core functionality.
The reason for running on Binance Smart Chain DEX is that its transaction fees are much lower than any other platform.
PancakeSwap, developed by an anonymous developer, was built on an Automated Market Maker (AMM) system and was released on September 20th, 2020.
The AMM system is a type that relies entirely on user-controlled liquidity to enable crypto trading. It allows users to swap or exchange tokens directly, especially BEP20 tokens without intervention. It also provides the user with a crypto token that they own in the liquidity pool. The user then receives a Liquidity Provider Token (LP) known as FLIP.
These LP tokens can be used to collect tokens from liquidity providers deposited in one of the liquidity pools with a portion of the PancakeSwap fees generated. PancakeSwap also provides liquidity through the yield farming of the governance token CAKE. It runs on Binance, but Binance does not control or manipulate Pancake Swap.
It could allow users to bring in tokens from other platforms via Binance Bridge and wrap the tokens with BEP20 tokens for use with PancakeSwap DEX. The most prosperous cryptocurrencies in PancakeSwap have been Bitcoin, BUSD, CAKE, and ALPACA.
What is Uniswap (UNI)?
Uniswap is the most widely-known Ethereum-based DEX with an AMM system, a liquidity pool instead of a purchase order, and LP tokens for liquidity providers. Uniswap is the parent chain of Pancake Swap, and unlike BSC, it uses the original Ethereum Blockchain to run the network. As one of the first highly successful Defi protocols, most DEXs somehow inherited functionality from Uniswap and ran on their platform.
Note that the AMM model does not require a partner on the other side of the buy or sell order to execute the transaction. As a result, less trading time is consumed on DEX using this model. These exchanges will give more people access to distributed token swapping by eliminating the need to perform the KYC (Know-Your-Customer) procedure.
As of September 2021, Uniswap's TVL was over $6.3 billion. The protocol has consistently had over 1.5 million users and trading volumes of $386 billion. The latest version of the protocol is Uniswap V3, released on the mainnet in May 2021.
Similarities between PancakeSwap and Uniswap
- Both exchanges use an automated market maker (AMM) model.
- Users can earn money by providing liquidity on either platform.
- Both exchanges operate on a decentralized platform.
- Both exchanges are managed and supported by the community.
- Both exchanges use an automated liquidity protocol.
- Both exchanges necessitate a browser wallet extension.
Differences between PancakeSwap and Uniswap
- PancakeSwap was launched on 20th of September, 2020, while Uniswap was launched on 2nd of November, 2018.
- PancakeSwap operates on Binance Smart Chain, while Uniswap operates on Ethereum-Blockchain .
- The native token on Uniswap is called the UNI token, while the native token on the Pancake swap is called CAKE.
- PancakeSwap listed around 200 crypto tokens. Uniswap listed more than 1600 crypto tokens.
- The Total Value Locked (TVL) for PancakeSwap is $6.5 billion, while the Total Value Locked for Uniswap exchange is $7.6 billion.
- Uniswap has to some extent, higher fees for token swaps compared to PancakeSwap due to higher gas fees. (Uniswap transaction fees are significantly rising every day). Uniswap has a supply cap of 1 billion UNI tokens, while PancakeSwap does not have a supply cap, making CAKE an inflationary token.
- Transactions get completed faster on the Pancake swap platform than on the Uniswap platform.
- Uniswap supports a lot more trading pairs than PancakeSwap.
- The PancakeSwap platform features Lottery Tickets while Uniswap does not.
PancakeSwap (CAKE) or Uniswap (UNI)?
Their diverse Blockchain and transaction fees offer both consumers and developers a chance to reflect.
Uniswap and Ethereum's developers urgently need to complete their transition to Serenity and finally solve their transaction fee nightmare.
PancakeSwap should also remain competitive. These challenges are ultimately convenient for consumers looking for an efficient Defi platform that offers competitive pricing.
Liquidity Providers review the terms of both exchanges to determine which platform is best to stake. This choice is the essence of a better free market with innovation.
Uniswap had an advantage in the early days, but PancakeSwap erased it. Their TVL is now in perfect tone, and both exchanges are performing incredibly well. PancakeSwap already has better daily trading volume due to higher transaction fees. However, many liquidity providers still prefer Uniswap because they can get better returns on this platform.
Ultimately, the entire decentralized exchange will benefit from this competition. Uniswap played an essential role in setting up the markers. Pancake Swap is here to take the baton and take things to the next level. Regular traders can enjoy all these benefits.
Considering the above similarities and differences between Uniswap and PancakeSwap, we can say, undoubtedly, that these two platforms are relatively young.
However, they have become notable names in the crypto space, with support from leading crypto casino DeFi BC GAME.
It is a unique moment in the history of the financial industry where all revolutionary innovations take place. These DEXs are at the forefront of driving this decentralized and digital future.
Initially, Uniswap was the dominant decentralized exchange in the industry. But PancakeSwap has proven to be more than just a startup. The difference in transaction fees is the most important reason it quickly closed the gap.
These two are essential parts of developing decentralized exchanges in the distant future.
Having read through the above article, which would you choose? PancakeSwap (CAKE) or Uniswap (UNI)? Feel free to let us know in our comment section!
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