Uniswap and PancakeSwap are two of the most popular platforms and for good reason. So, which one is the better platform? Let's take a closer look at each exchange to find out.
Uniswap Vs PancakeSwap: Which Is Better Decentralized Exchange?
The rise of decentralized finance has allowed investors to take advantage both in terms of price appreciation as well as profits booking. In the world of decentralized exchanges, there are a few clear frontrunners. Uniswap and PancakeSwap are two of the most popular platforms and for good reason.
They both offer a unique blend of features that make them ideal for users who value decentralization, security, and flexibility. So, which one is the better platform? Let's take a closer look at each exchange to find out.
Uniswap Vs PancakeSwap: An Overview
Founded in 2018, Uniswap is built on the Ethereum blockchain and allows users to easily trade tokens. With a large user base and over $7.6 billion in total value locked (TVL), Uniswap is one of the most popular cryptocurrency exchanges. In addition, Uniswap offers a wide variety of tokens, making it a great choice for those looking to diversify their portfolio.
Whether you're a seasoned investor or just getting started in the world of cryptocurrencies, Uniswap is a great platform. When compared to the other contemporary decentralized exchanges, Uniswap provides better liquidity as well as slippage protection. Uniswap also allows its users to trade directly from their wallets without any fees charged.
Uniswap uses a mathematical formula to automate the exchange process. Known as the "X x Y = K" formula, Uniswap has gained recognition for its ability to solve liquidity issues that other platforms have struggled with in the past. By keeping all crypto trades automated, Uniswap allows anyone who holds crypto tokens to access the platform and make trades. As a result, Uniswap has become a go-to choice for many investors looking to trade cryptocurrencies.
It is built on the automated market maker model, which incentivizes users to create their own liquidity pools for any kind of crypto tokens they hold. This removes the identity requirements of the users, which reduces risks and trading costs for involved users. Uniswap also has a feature that allows users to create their own smart contracts, which helps to further reduce costs and risks.
PancakeSwap is one of the most popular cryptocurrency platforms available today. It is a decentralized exchange (DEX) platform that runs on Binance smart chain. PancakeSwap was developed by anonymous developers and was launched on September 20 in the year 2020. The platform provides many features other than the core features of Uniswap, including low trading fees. As a result of running on the Binance smart chain, PancakeSwap has become one of the most popular cryptocurrency platforms available today.
The key feature that sets PancakeSwap apart from other exchanges is its use of an automated market maker (AMM) system. This allows users to provide liquidity to the exchange by depositing their tokens into a liquidity pool. In return, they receive liquidity provider (LP) tokens. PancakeSwap also offers a staking program, which allows users to earn rewards for providing liquidity to the platform.
Unlike other exchanges, PancakeSwap does not require user accounts or know-your-customer (KYC) compliance. Instead, it relies on so-called "smart contracts" to facilitate trades. This makes PancakeSwap one of the most accessible and user-friendly exchanges in the market. In addition to its ease of use, PancakeSwap also offers competitive trading fees and a wide selection of tokens. The platform also features a unique "liquidity mining" system that allows users to earn rewards for providing liquidity to the exchange.
|TVL (total value locked)||TVL for PancakeSwap is $6.5 billion.||TVL in Uniswap exchange is $7.6 billion|
|Transaction cost||Lower transaction cost.||Significantly rising every day.|
|No. of listed tokens||Listed around 200 crypto tokens.||Listed more than 1600 crypto tokens|
|Runs on||Operates on Binance Smart Chain.||Operates on Ethereum blockchain|
|Launch time||Launched on 20 September 2020.||Launched on 2 November 2018.|
5 Key Differences Between Uniswap & PancakeSwap
- Uniswap is the clear winner when it comes to total value locked in an exchange. With more than $7 billion TVL, Uniswap has well past any other type of trading platform and continues rising while PancakeSwap still remains low at around six-and five+ trillion respectively.
- The transaction costs in Uniswap are comparatively higher than that of PancakeSwap due to its use on the Ethereum blockchain. Each day, more people will be using this exchange which means there's a greater chance your transactions won't go through for some reason or another. Therefore, maximizing security measures like requiring an extra fee when sending funds from one address/account type(s) onto another.
- The number of crypto tokens on Uniswap is greater than that found in PancakeSwap due to its ability to accommodate more diverse cryptocurrencies. The ratio between the two sites also varies depending upon which pair you look at. There are nearly twice as many coins available through PancakeSwap, if we go by uncompressed listings then only about one-third less amount can be seen with us here at pancakes HQ.
- PancakeSwap is a Binance Smart Chain-based business, while Uniswap operations run on the Ethereum blockchain.
- Uniswap has been around since 2018, while PancakeSwap only came onto the scene in 2020. It's no wonder that Uniswap is expanding so much more than its predecessor- they had 2 whole years to get their name out there.
Uniswap Vs PancakeSwap: Trading Volume & Fees
The cost of transactions on Ethereum has been systematically increasing over time, leading traders to seek alternatives. BSC had positioned itself as a low-cost competitor for this reason - when the Exodus away from popular apps began in early April it was finally ready with its own product.
It's no wonder that during one busy day in April, PancakeSwap managed to rack up over 2 million transactions. On the other hand, all of Ethereum combined had only been able to make 1.5 million through by then too. For a time, PancakeSwap replaced Uniswap as the world's largest decentralized exchange by trading volume.
There has been a recent shift in the Uniswap trading platform that's made it cheaper to trade Ethereum. These changes are due partially because transaction expenses on PancakeSwap have decreased, making their prices more accessible for users who want access without dealing with cryptocurrency exchanges' fees.
Additionally, there are 218 projects built around Ethereum versus just 36 based on BSC which means you can find even greater amounts of ERC-20 token volume available through this one method. Meaning if anything happens related directly or indirectly involving these tokens (e.g., they drop dramatically), people will be able to notice right away thanks to entirely too much readily at hand.
Uniswap Vs PancakeSwap: User Experience
The interface of PancakeSwap has a lighter color scheme and uses animal characters to make it more playful. On the other hand, Uniswap is all about minimalistic cleanliness with an emphasis on what you're doing at that moment - namely trading coins.
When comparing PancakeSwap to Uniswap, it’s worth noting that the former requires you to connect a Web3 wallet with MetaMask. However, those who already have an Ethereum address from Binance Smart Chain will be able to use this exchange without any additional steps because their platform works natively on ETH.
The visually appealing Uniswap platform has a sleek and user-friendly interface, but it's slow when trading compared to Binance Smart Chain which processes more transactions per second. However, in terms of speediness; PancakeSwap comes out ahead because its network relies heavily on Ethereum while still being able to provide quickens trade processing times for users through their use of blockchain technology.
When trading with PancakeSwap, you can expect quick trades that only take about three minutes. On the other hand, Uniswap might require a few hours for each exchange due to gas costs - making their user experience equal between these platforms but not necessarily better or worse depending on what's more important in your eyes.
Uniswap Vs PancakeSwap: Yield Farming
The only way to earn yields on Uniswap is by collecting trading fees from liquidity pool tokens. This means that you'll have different opportunities for earning a yield depending on how much money goes into the system each day. Also, what type of trader do they want their funds invested in the short term versus long terms markets, etc.
At PancakeSwap, you can find a massive variety of DeFi farming options to suit any need. The best part? You're not limited by one or two farms - there is an infinite number available. The Syrup Pools are another way to make a mint by farming for CAKE tokens. These juicy yields allow you to stake your investment in BSC projects and get back even more than what was put down.
Uniswap Vs PancakeSwap: Native Tokens
The Uniswap token has a unique function in that it can be used to propose changes and decisions for the protocol. You are able to use your holdings of this governance coin as part or all input into proposed motions, which will shape how Uniswap operates now or down through time.
Unfortunately, UNI doesn't have any functionality beyond governance right now. You can’t stake or earn fees through the network and you don't even get yield-bearing tokens as compensation for holding their token.
PancakeSwap tokens or CAKE for short is a dynamic cryptocurrency that can be used in several ways. One of the most exciting features about this crypto token is how you could earn more through staking and trading fees if it's integrated with your favorite exchange. The best part? You don't even need any expensive hardware because all trades happen on Autopilot mode by setting up limit orders at just below market price.
The more CAKE you have, the better! Staking will allow for even greater returns on your investment. Depositing in Syrup Pools means that not only do we get a healthy return but also other BEP 20 tokens which can be used as part of our liquidity pool pair at PancakeSwap Farms.
Uniswap Vs PancakeSwap: Pros & Cons
PROS of Uniswap
- Security: Uniswap is a decentralized exchange, which means that it is not subject to the same security risks as centralized exchanges. Because there is no central point of control, hackers cannot target Uniswap in order to steal user funds.
- Decentralized governance: Uniswap is governed by its users, who can vote on protocol changes through a decentralized voting process. This ensures that the interests of users are always taken into account when making decisions about the future of the platform.
- Improved liquidity: Uniswap offers improved liquidity compared to centralized exchanges, due to its use of smart contracts. These contracts automatically match buyers and sellers, ensuring that trades can always be executed quickly and smoothly.
- Most liquidity for Ethereum ERC-20 tokens: Uniswap has the most liquidity of any decentralized exchange, making it the best place to trade Ethereum tokens.
- First-mover advantage: Uniswap was the first decentralized exchange on the Ethereum network and has benefited from being the first mover in space.
CONS of Uniswap
- Relatively slow: Due to its popularity, Uniswap often experiences high traffic which can lead to slow transaction times and high gas fees.
- Uniswap V3 has slippage problems: This means that when trading on Uniswap, you may experience more slippage (price difference between what you expect to pay and what you actually pay) than on other DEXs.
- Complex user interface: The user interface of Uniswap can be complex and confusing for new users. This can make it difficult to learn how to use the platform and may discourage some people from using it.
- Limited number of tokens: Uniswap only supports a limited number of Ethereum-based tokens, which may not be suitable for everyone. If you want to trade tokens that are not supported by Uniswap, you will need to use another exchange.
PROS of PancakeSwap
- Tons of liquidity locked in pools: This means that there is always enough money available to trade assets on PancakeSwap. This is in contrast to centralized exchanges, which often have issues with liquidity.
- Easy to use: PancakeSwap can be accessed via the Binance Bridge, which makes it easy to trade assets from Ethereum.
- Much cheaper and faster than Uniswap: PancakeSwap is a lot cheaper and faster to use than Uniswap, another popular DEX on Ethereum.
- Endless yield farming options: PancakeSwap offers a range of yield farming options, which allows users to earn rewards for providing liquidity to the platform.
- Decentralized: PancakeSwap is a decentralized exchange, which means that it is not subject to the same regulations as centralized exchanges. This can be a benefit for users who value privacy and security.
- Earn rewards: Users can earn rewards for providing liquidity to the PancakeSwap pool. This is a great way to earn passive income from your crypto holdings.
CONS of PancakeSwap
- Cluttered user interface: The PancakeSwap interface can be a bit cluttered and confusing for some users.
- You need to bridge assets from Ethereum: In order to trade on PancakeSwap, you need to first bridge your assets from Ethereum. This can be a bit of a hassle for some users.
- Trading volume has been dwindling: The trading volume on PancakeSwap has been declining in recent months.
- BSC is suffering lots of exploits lately: The Binance Smart Chain has been suffering from a lot of exploits lately, which has led to some security concerns.
- Smart contract risk: As with any decentralized exchange, there is always the risk that the smart contract could contain bugs that could lead to loss of funds. While the team behind PancakeSwap has done a great job of auditing the smart contract, it is always important to do your own research before investing.
- Lack of regulation: Because PancakeSwap is decentralized, it is not subject to the same regulations as centralized exchanges. This lack of regulation could be a turnoff for some users who prefer the security of regulated exchanges.
Uniswap Vs PancakeSwap: FAQs
Which platform is better?
There is no clear answer as to which platform is better. It ultimately depends on your individual needs and preferences. If you are looking for a decentralized exchange with a wide range of ERC20 tokens, then Uniswap is a good choice. However, if you are looking for an affordable option with fast transaction times, then PancakeSwap may be a better choice.
Do you need a wallet to buy on Uniswap?
No, you don't need a wallet to buy on Uniswap. In fact, you don't need a wallet at all. All you need is an Ethereum address. That's it. You can use any address you want - it doesn't have to be a wallet. It can be an exchange account, a contract, or even a smart contract. There are no restrictions on who can buy or sell on Uniswap.
Who is behind PancakeSwap?
According to their website, the team consists of "a group of passionate blockchain engineers and designers." However, there is very little information about the team available. The website does not list any team members or provide any contact information.
In the end, it may come down to personal preference. Those who value convenience may prefer PancakeSwap, while those who prioritize low fees and liquidity may prefer Uniswap. No matter which platform you choose, decentralized exchanges offer a great way to trade cryptocurrency without giving up control of your private keys.