Difference Between PancakeSwap and Uniswap (With Table)

In the present scenario, the crypto community is expanding, with people adding every day at a high rate. There are many platforms introduced to the crypto community, among which are PancakeSwap and Uniswap. There are quite a few differences between both platforms in terms of services and other parameters that make both stand unique.

PancakeSwap vs Uniswap

The difference between PancakeSwap and Uniswap is that PancakeSwap runs on Binance Smart Chain, which offers significantly lower transaction costs and on the other hand, Uniswap operates on Ethereumblockchain, which includes ETH for every Ethereum transaction and thus, in turn, increases the transaction cost by a pretty high amount in comparison to any other platforms.

PancakeSwap is a decentralized exchange that runs on Binance smart chain. Pancakeswap was introduced on 20th September 2020. It is an automated market maker (AMM) that enables users to trade crypto tokens and provides liquidity. PancakeSwap was build inspired by the Uniswap platform, and thus it provides all the core features that Uniswap offers.

Uniswap is the most famous platform for decentralized crypto exchange, and it runs on the Ethereumblockchain. It enables the automated exchange of several cryptocurrency tokens. It was the first and the best platform to be known among the crypto community for an automated market maker (AMM). Uniswap aims to solve liquidity problems with its automated solutions.

Comparison Table Between PancakeSwap and Uniswap

Parameters of comparisonPancakeSwapUniswap
TVL (total value locked)TVL for PancakeSwap is$6.5 billion.TVL in Uniswap exchange is$7.6 billion.
Transaction costLower transaction cost.Significantly rising every day.
No. of listed tokensListed around 200 crypto tokens.Listed more than 1600crypto tokens
Runs onOperates on Binance Smart Chain.Operates on Ethereumblockchain.
Launch timeLaunched on 20 September 2020.Launched on 2 November 2018.

What is PancakeSwap?

PancakeSwap is a decentralized exchange (DEX) platform that runs on Binance smart chain, which is somewhat similar to Uniswap, but it provides many other features other than the core features of Uniswap. As a cause of running on the Binance smart chain DEX, the trading fees in it are much lower than any other platform. PancakeSwap was developed by anonymous developers and was launched on September 20 in the year 2020.

It was built on an automated market maker (AMM) system, a system that completely depends on user-fueled liquidity in order to allow crypto trades to take place. It facilitates the users to exchange or swap tokens, specifically BEP-20 tokens, directly without any intermediary. It offers the users to deposit crypto tokens that the user has in possession into liquidity pools in return to which the user receives liquidity provider (LP) tokens which are known by the name FLIP.

These LP tokens can be used to reclaim the tokens by the liquidity providers that were deposited in any of the liquidity pools along with a part of the generated PancakeSwap fees. PancakeSwap also provides liquidity through yield farming of its governance token that is CAKE. Even though it runs on Binance, Binance does not have any control over PancakeSwap, neither does Binance operates it.

It has a feature that allows users to bring tokens from other platforms via the Binance Bridge and wrap the tokens into the BEP-20 token to be used in PancakeSwap DEX. The most flourishing cryptocurrencies in PancakeSwap have Wrapped Bitcoin, BUSD, CAKE, and ALPACA.

What is Uniswap?

Uniswap was founded by Hayden Adams and was launched on 2 November in the year 2018. Uniswap was built on the Ethereumblockchain, and it was the most famous platform for the exchange of cryptocurrency tokens. With a larger user base, it has achieved a TVL of over $7.6 billion and a comparatively higher no of tokens that are listed under it as it was the first trading platform built on an automated market maker (AMM).

It uses a formula which is X x Y = K, for the automated exchange process. It gained recognition within a short period due to its automated solutions that used to solve the liquidity issues which other platforms were unable to solve back in the years before 2018. This platform keeps all the crypto trades automated on it and open for any user that holds crypto tokens on Uniswap.

It also has a feature that removes the identity requirements of the users so that any of the users have the authority to create their own liquidity pools for any kind of crypto tokens they hold. As it is built on the automated market maker, it also incentivizes the activities of users by reducing risks and trading costs for involved users. It gained considerably larger popularity in the year 2020.

Main Differences Between PancakeSwap and Uniswap

  1. The total value locked (TVL) in Uniswap exchange is way ahead of PancakeSwap or any other exchange type as it has more than $7.6 billion TVL in its exchange, whereas PancakeSwap is still rising and has around $6.5 billion TVL.
  2. As Uniswap is built on Ethereumblockchain in which each transaction costs ETH, also known as the gas fee, is only rising high with every day passing by. Thus, the transaction costs in Uniswap are comparatively higher than that of PancakeSwap.
  3. Talking about the number of tokens that are listed on the exchanges in PancakeSwap and Uniswap, Uniswap definitely stays above PancakeSwap as it has more than 1600 crypto tokens under it, whereas PancakeSwap has around 200 crypto tokens.
  4. PancakeSwap runs on Binance Smart Chain, whereas Uniswap operates on euthereum blockchains.
  5. Uniswap launched in the year 2018 on 2nd November, whereas PancakeSwap was launched in the year 2020 on 20th September. Thus, Uniswap had 2 years ahead of PancakeSwap and expanded so vast.

Conclusion

The year 2020 was recognized or termed as the year of Defi, meaning the year of decentralized finances as cryptocurrency gain wide recognition from all over the world. PancakeSwap and Uniswap are the famous projects of the decentralized finance world. 

No doubt that Uniswap has a larger community as it has the advantage of two extra years to achieve that, but on the other hand, PancakeSwap is still hiking up, and it seems pretty near to achieve the same wider user base as Uniswap. Considering the price performance of both, the demand for CAKE is considerably higher than that of UNI.

References

  1. https://cryptome.org/0005/bitcoin-who.pdf
  2. https://elibrary.ru/item.asp?id=32747722
  3. https://arxiv.org/abs/1911.03380
  4. https://mpra.ub.uni-muenchen.de/id/eprint/103925
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