The current situation is that the crypto community continues to grow, with many people adding daily at a rapid rate. PancakeSwap is one of many platforms that have been introduced to the crypto community. Both platforms have some differences in terms of service and other parameters, which makes them unique.
The unstoppable ride of Ethereum since December 2020’s launch of the Beacon Chain was stopped by some in February 2021. Ironically, the problems were caused by Ethereum’s price rise. The second-largest cryptocurrency in the world, driven by an all-time high (ATH) of more than $2,000 and an increase in the popularity and use of staking apps, started to slow down due to congestion and outrageous gas charges. Gwei reached its peak of 373.8 Gwei in February 2021. During peak periods, transaction fees for Ethereum DApps such as Uniswap may reach hundreds of dollars. Some developers and users were forced to move to better alternatives.
The Binance Smart Chain (BSC), and its popular decentralized exchange (DEX), PancakeSwap, capitalized on this migration in a big manner. This has sparked new inter-chain rivalries among Ethereum and BSC and their respective flagship exchanges Uniswap or PancakeSwap that could decide the future of DeFi.
PancakeSwap Vs. Uniswap
PancakeSwap and Uniswap are different because PancakeSwap uses Binance Smart Chain which has significantly lower transaction costs. Uniswap, on the other side, operates on Ethereumblockchain which includes ETH for every Ethereum transaction. This, in turn, raises the transaction cost considerably in comparison to other platforms.
PancakeSwap, a decentralized exchange, runs on Binance smart chains. Pancakeswap launched on September 20, 2020. It’s an automated market maker (AMM), which allows users to trade cryptocurrency tokens and provides liquidity. PancakeSwap was inspired by the Uniswap platform and offers all of the core features that Uniswap has to offer.
Uniswap, which runs on Ethereumblockchain, is the most well-known platform for crypto exchange decentralized. It allows the automatic exchange of many cryptocurrency tokens. It was the first and best platform for automated market makers (AMM) in crypto. Uniswap aims at solving liquidity problems through its automated solutions.
PancakeSwap uses an automated market-maker model to fulfill orders. PancakeSwap replaces an order book with a liquidity pool.
PancakeSwap claims that it is the most popular decentralized platform with more than 2.8 million users and $9.9 Billion in total value (TVL) as of September 2021. PancakeSwap is the latest version. There are 1,426 token pairs to trade on DEX.
PancakeSwap (decentralized exchange) platform runs on Binancesmartchain, which is similar to Uniswap but offers many additional features beyond the core features of Uniswap. The trading fees for PancakeSwap are lower than other platforms because it runs on the Binancesmartchain DEX. PancakeSwap was created by anonymous developers. It was launched in 2020 on September 20th.
It is based on an automated market maker system (AMM), which completely relies on user-fueled liquidity to enable crypto trades to occur. It allows users to swap or exchange tokens directly, specifically BEP-20 tokens. It allows users to deposit crypto tokens they have in their possession into liquidity pools. In return, the user receives liquidity provider tokens (LP), also known as FLIP.
These LP tokens are used by liquidity providers to reclaim tokens that were deposited into any liquidity pool along with a portion of PancakeSwap fees. PancakeSwap provides liquidity by yield farming its governance token, CAKE. It runs on Binance. However, Binance has no control over PancakeSwap and Binance doesn’t operate it.
It allows users to import tokens from other platforms through the Binance Bridge, and then wrap them into the BEP-20 token that can be used in PancakeSwap DEX. The most popular cryptocurrencies in PancakeSwap are Wrap Bitcoin, CAKE, Bitcoin, and ALPACA.
Hayden Adams founded Uniswap and it was launched in November 2018, the year 2018. Uniswap was created on the Ethereumblockchain and was the most popular platform for cryptocurrency token exchange. It has a greater user base and has a TVL exceeding $7.6 billion. Additionally, there are a higher number of tokens listed under it because it was the first trading platform to be built on an automated market maker (AMM).
The automated exchange process uses a formula that is XxY = K. It was recognized quickly due to its automated solutions, which solved liquidity problems that other platforms could not solve in years past 2018. It automates all crypto trades and is available to any user who holds crypto tokens on Uniswap.
It also features a feature that removes user identity requirements so that users can create their own liquidity pools to hold any type of crypto tokens. It is built on the automated marketplace maker and incentivizes users’ activities by reducing trading costs and risks. It has seen a significant increase in popularity since 2020.
Difference between PancakeSwap and Uniswap
- The total value locked (TVL), in Uniswap’s exchange is more than PancakeSwap and any other type of exchange. It has more TVL than PancakeSwap, which has approximately $7.6 Billion TVL. PancakeSwap has about $6.5 Billion TVL.
- Uniswap uses Ethereumblockchain, which means that each transaction costs ETH. Also known as the gas fees, Uniswap’s price per transaction is increasing with each passing day. Uniswap’s transaction costs are comparatively more expensive than PancakeSwap.
- Uniswap is more popular than PancakeSwap because it has over 1600 crypto tokens, while PancakeSwap only has 200.
- PancakeSwap uses Binance Smart Chain while Uniswap uses Euthereum Blockchains.
- Uniswap was founded in 2018 on 2nd Nov., while PancakeSwap was established in 2020 on 20 September. Uniswap was 2 years ahead ofPancakeSwap and has grown so much.
2020 was referred to as the Year of Defi. It stands for the year that decentralized finance such as cryptocurrency gains wide recognition around the globe. PancakeSwap is a well-known project of decentralized finance.
Uniswap may have a larger user base because it has two more years to do so. However, PancakeSwap continues to grow and seems to be on track to reach the same broad user base as Uniswap. CAKE’s price performance is significantly better than UNI.