Decentralised exchanges (DEXs) started to gain popularity in late 2018 with the advent of the first automated market maker Uniswap. Since then, the DEX space has come a long way, and there are several platforms to choose from currently. Let us consider Pancake Swap — a DEX that boasts a large user base. According to DefiLlama, PancakeSwap ranks as the second-largest DEX by cumulative volume, bested only by Uniswap.

But what are the differences between the platforms and which DEX leads the market in 2023?

Trading Volume and active users

When comparing different decentralised exchanges (DEXs), one of the most important factors to consider is trading volume. According to DefiLlama, Uniswap’s trading volume over the last week was $9 billion. PancakeSwap, on the other hand, recorded a trading volume of $2 billion in the last seven days, which was significantly lower than that of Uniswap.

A few reasons why Uniswap’s trading volume is higher is because it has been around longer and supports a wider range of tokens. Additionally, Uniswap’s latest protocol version 3 is designed to improve capital utilisation, which is supposed to make it more appealing for traders to use the platform.

But in terms of the user base, PancakeSwap manages to beat its rival. In January, PancakeSwap was reported to have 1.37 million users compared to Uniswap’s 555,000. Furthermore, daily active users on PancakeSwap averaged around 100,000 in April, significantly larger than Uniswap’s 50,000 daily active users, as per Token Terminal. The functionality of both protocols explains why PancakeSwap has a growing user base.

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Transaction Fees

Uniswap, which is based on the Ethereum blockchain, tends to charge relatively higher gas fees due to network congestion. Uniswap charges 0.3 percent of every transaction one makes, making it an expensive platform to use for small traders.

PancakeSwap, which is based on the Binance Smart Chain, offers variable fees that vary depending on the liquidity available in a specific pool. However, it typically charges a 0.25 percent commission, which is lower than that of Uniswap.

Listed tokens

Uniswap supports a wide range of tokens, including ERC-20 tokens and newer standards such as ERC-721 (NFTs) and ERC-1155. In contrast, PancakeSwap only supports tokens built on the Binance Smart Chain.

Both have their downsides. Because Uniswap supports more tokens, it has occasionally been used by fraudsters to run scam-related projects. PancakeSwap, is not immune to such activity as well. When compared to the Ethereum blockchain, the Binance smart chain is less audited and more vulnerable to hacks and thefts.

Native tokens

Pancakeswap’s native token ‘CAKE’ and Uniswap’s native token ‘UNI’ are used to reward users for providing liquidity on the platform. Both tokens allow users to vote on proposed upgrades and changes to their respective platforms. For example, last month, Pancakeswap VS even provided users with a chance to claim their portion in a $135K-airdrop, along with improved liquidity provisioning, competitive trading fees, and trading incentives, among other things.

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Meanwhile, the Uniswap community voted in favour of introducing the V3 protocol on the BNB Smart Chain in February.

User Interface and User Experience

In terms of the user interface, Uniswap provides a clean and easy-to-use platform for trading tokens. Its integration with popular wallets like Metamask and Coinbase Wallet offers an added advantage to users, enabling them to connect their wallets quickly and begin trading.

PancakeSwap also boasts a user-friendly interface with a layout similar to Uniswap. However, Pancakeswap offers an additional feature to attract users, which is the ability to stake CAKE tokens. This feature has proved to be very popular among users, making Pancakeswap an attractive option for yield farming.

Conclusion

By comparing raw statistics such as liquidity and trading volumes, Uniswap is leading the race. However, PancakeSwap has a larger user base and its growth potential appears to be strong. Though both have their own pros and cons, it depends on what benefits a trader is looking for to fit their requirement.

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