Cryptocurrency

Uniswap vs Pancake Swap Comparative Analysis

Uniswap vs PancakeSwap

Snapshot:

  • What is Uniswap (UNI)?
  • What is PancakeSwap (CAKE)?
  • Uniswap vs PancakeSwap: Key Takeaways 
  • PancakeSwap vs Uniswap: Comparative Analysis
  • Is PancakeSwap better than Uniswap 
  • How to invest in PancakeSwap Token(CAKE) or Uniswap Token(UNI)

What is Uniswap (UNI)?

Uniswap (UNI) is one of the most popular decentralized trading protocols that is popular for facilitating automated trading of DeFi tokens. It is also an automated market maker (AMM) that was launched in 2018 and has gained considerable attention since its inception. It gained a lot of traction especially in the year 2021 when the crypto space saw the DeFi boom. 

Also Read: UniSwap Fundamental Analysis

What makes Uniswap unique? 

Uniswap’s goal is just not to keep token trading automated but also completely open to everyone who holds tokens. It also focuses on improving the efficiency of trading as compared to traditional trading exchanges. Greater efficiency is created by Uniswap by resolving issues around liquidity using automated solutions as well as avoiding those issues that caused harm to the previous decentralized exchanges. 

Moving one step further in 2020, Uniswap created and awarded its own governance token, UNI, to its previous users. This was done in order to enhance the ability and the profitability of the users to shape its future. Uniswap aims to resolve issues that plagued platforms such as EtherDelta. It limits the risks as well as reduces costs for all parties by automating the procedure of market-making. This mechanism also does away with the identity requirements for users and lets anyone create a liquidity pool for any pair of tokens. 

Uniswap also launched a second version in November 2018 that introduced new features like ERC-20 pairs, flash swaps, price oracles, etc. The latest version, Uniswap V3 was launched in May 2021 and has greater capital efficiency for liquidity providers. The infrastructure for this version is also better and enhanced. 

Uniswap price at the time of writing (December 28, 2021) is $18.19

Additional Read: What is DeFi? Top 5 DeFi Tokens 

What is PancakeSwap (CAKE)?

PancakeSwap is an AMM (automated market maker) that lets users exchange tokens by providing the necessary liquidity through farming as well as earning fees in exchange. Despite its funny name, PancakeSwap is no joke in the decentralized finance (DeFi) space. It clocks more than $100 million trading volume in a day and is one of the top decentralized applications (DApps) to date. 

What makes PancakeSwap unique?

Launched in September 2020, PancakeSwap is one of the top cryptocurrency decentralized exchanges (DEX) for swapping BEP20 tokens on BSC (Binance Smart Chain). An automated market maker (AMM) model is used by PancakeSwap allowing users to trade against the liquidity pool. In these pools, there are users who deposit their funds and receive liquidity provider (LP) tokens in exchange. 

These tokens are later utilized by the users to reclaim their pool share as well as a portion of the trading fees. The name given to these LP tokens is FLIP. Users can also farm additional tokens such as SYRUP and CAKE. Users are rewarded with CAKE tokens once they deposit LP tokens on the farm. Users can even stake the tokens to earn more CAKE tokens or tokens from other projects. 

The native token of PancakeSwap Decentralized Exchange is CAKE which is a BEP20 token and was originally launched on BSC. The primary goal of the CAKE token is to incentivize the liquidity provision. It gives users the opportunity to increase and invest their returns in the future however, comes with added risks. PancakeSwap token price as of writing (December 28, 2021) is $12.67. CAKE coin price reached an all-time high of $44.18 in April 2021. 

Additional Read: What is Binance Smart Chain? Top 5 Projects on Binance Smart Chain

Uniswap vs PancakeSwap: Key Takeaways of Top Decentralized Exchanges

The unique features of the Uniswap (UNI) are:

  • Uniswap exists to create liquidity. 
  • It attempts to resolve issues of previous DEXs such as the EtherDelta platform in regards to liquidity. 
  • The protocol incentives the activity of market making by reducing costs and limiting risks for all parties since the entire process is automated. 

The unique features of the PancakeSwap (CAKE) coin are: 

  • It is an automated market maker (AMM) allowing users to exchange tokens, provide liquidity through farming and earn fees in return.
  • It is a decentralized exchange (DEX) for swapping BEP20 tokens on Binance Smart Chain. 
  • The main function of the CAKE token is to incentivize the liquidity provision of the PancakeSwap platform.

Additional Read: What are the advantages of DeFi? 

PancakeSwap(CAKE) Vs Uniswap(UNI): Comparative Analysis

Comparison Basis  PancakeSwap (CAKE) Uniswap (UNI)
Launch date  September 2020 November 2018
Founders Anonymous  Hayden Adams
Blockchain protocol  Binance Smart Chain Ethereum 
Token type  Native Governance 
Use case Decentralized exchange  Decentralized exchange 
Market Cap* $3,194,518,068 $11,431,572,754
Circulation Supply** 252,043,050.50 CAKE 628,516,329.95 UNI
Consensus method Delegated PoS (proof-of-stake) and PoA(proof-of-authority) PoW (Proof-of-work) 

MarketCap* and Circulation Supply** as of December 2021

Source: CoinMarketCap

PancakeSwap (CAKE) & Uniswap (UNI) Price Trends (Monthly)

PancakeSwap vs Uniswap

Additional Read: PancakeSwap Price Prediction 

Should you buy a PancakeSwap(CAKE) or Uniswap(UNI)

Both 2020 and 2021 have been incredible years for decentralized exchanges. Uniswap was considered as the benchmark for these DEXs. However, PancakeSwap increased its liquidity by more than 1000% in less than two months. This skyrocketed its volume from $37 million to $1 billion within a time span of 21 days. This interesting growth of the decentralized exchange was attributed to the shortcomings of  Uniswap. 

The ETH-powered network suffered issues of scalability due to its dependence on the proof-of-work (PoW) mechanism which led to increased congestion and thereby rise in transaction costs or gas fees. However, this issue is being resolved by Ethereum as it migrates to the PoS consensus mechanism through Ethereum 2.0 which shall resolve the scalability issues. However, the entire rollout is yet to take some more time. The latest rollouts have been the London Hard Fork and Altair upgrade. 

Additional Read: What is Ethereum’s Altair Upgrade?

Is Pancake Swap better than Uniswap? 

There are thousands of pf cryptocurrencies out there and needless to say hundreds of crypto exchanges. It becomes extremely difficult for a user to identify the top cryptocurrency decentralized exchanges. But need not to worry, let us first find out which exchange between Uniswap and PancakeSwap is better. Both these exchanges are the biggest DEXes in the world. There is no right or wrong answer to which is better as both have their own advantages. 

Here is a summary that will help you choose better. 

PancakeSwap Advantages

PancakeSwap is based on Binance Smart Chain that offers efficiency and affordability, as well as inter-blockchain compatibility. In February 2021 PancakeSwap surpassed Uniswap as the largest automated market maker-based exchange. However, PancakeSwap couldn’t last long in the position and was soon overtaken by Uniswap in September 2021. However, despite overtaking PancakeSwap, Uniswap still is in the second position in the list of top DEXs with the list being led by Biswap. 

While the adoption rate of PancakeSwap is still high, Uniswap remains the older DEX with a loyal and considerable user base. It was one of those projects that introduced AMM to DeFi which was not done before. Although PancakeSwap has more active users than Uniswap, the trading volume of the latter is higher. This indicates the users at Uniswap are trading at a higher value. 

Uniswap Advantages 

Uniswap is an Ethereum based DEX, clearly, its transaction cost is way higher than the Binance smart chain-based PancakeSwap. This is one of the reasons why it could not dominate the DEX niche. BSC also provides faster transactions apart from just reducing the gas fees to pennies. The number of tokens listed on PancakeSwap is higher than that of Uniswap. Some unique and successful tokens such as FRONT and BAKE are listed on PancakeSwap. However, both these decentralized exchanges have low-quality listings. 

The choice of the token between Uniswap and PancakeSwap depends entirely on the preference and risk appetite of the user. Various factors must be kept in mind before investing in any cryptocurrency. We always recommend DYOR ( Do your own research ) before investing in any cryptocurrency. 

Additional Read: PancakeSwap(CAKE) Technical Analysis & Uniswap(UNI) Technical Analysis 

How to invest in both PancakeSwap Token (CAKE) and Uniswap Token (UNI)

Investing in crypto is super simple, safe, and secured with the CoinDCX app. It doesn’t matter whether you want to invest in the CAKE token or the UNI coin, we have got you covered. Want to buy Uniswap in India at the best price? CoinDCX is India’s safest and simplest crypto exchange for your one-stop purchase of any cryptocurrency. 

Here are the 3 simple steps to buy your first metaverse token with CoinDCX. 

  1. Sign up on CoinDCX 
  2. Link your bank details 
  3. Buy PancakeSwap token (CAKE) or Uniswap token (UNI) 

Disclaimer: The above views, information represent the independent views of Primestack Pte. Ltd, Neblio Technologies Pvt. Ltd, and/or their affiliate entities and are for informational/ educational purposes only. The content, information or data provided above is not an offer, or solicitation of an offer, to invest in, or to buy or sell any interest or shares, digital assets/ cryptocurrencies or securities, or to participate in any investment or trading strategy. Any statement or communication made above shall not be treated as legal, financial, investment or tax advice by the reader. The calculations, data, risk-return formulations, performance or market capitalization indicators captured above are based on the independent data sourcing including collation of public information and/or analysis performed by analysts, advisors or employees of Primestack Pte. Ltd/ Neblio Technologies Pvt. Ltd and/or their affiliate companies and/or any third party. Past performance is not indicative of any future results. The reader(s) are hereby advised to consult their financial/ legal/ tax advisor(s) before making any investment.


 

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