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DEX Comparison: Uniswap Vs Venus Vs PancakeSwap

DEX Comparison: Uniswap Vs Venus Vs PancakeSwap

The year 2020 was called “DeFi Year,” and it exposed the crypto world to a slew of new and exciting DeFi ventures, including Venus and PancakeSwap.

Both of these projects are based on the Binance Smart Chain ecosystem, which many developers and traders see as a viable alternative to Ethereum, which currently houses many of the most successful DeFi projects, including the Uniswap exchange.

Ethereum’s scalability problems, as well as its dependence on the PoW (proof-of-work) algorithm and high gas fees, are the primary reasons for its decline in popularity among crypto traders.

The BSC, on the other hand, employs a PoSA (proof-of-staked-authority) consensus system, which allows for a three-second block time and considerably lower transaction fees.

When comparing their features, it goes without saying that the BSC is more efficient than Ethereum in theory.

As the crypto community weighs in on the hosting ecosystems BSC and Ethereum, it’s no surprise that comparisons between projects like Uniswap, PancakeSwap, and Venus will emerge, particularly given how similar these platforms are.

We’ll see how the Uniswap vs. Venus vs. PancakeSwap debate plays out in this article, but first, let’s take a look at each of the contenders.

What is UniSwap?

The Uniswap exchange, which enables automated transactions of various cryptocurrency tokens and is built on the Ethereum blockchain, is one of the most well-known projects within the decentralized finance universe.

Hayden Adams created the website, which was launched in November of last year.

The hype 2020 brought surrounding crypto trading made sure the platform saw a larger number of users operating on the platform, and gained increased popularity.

Uniswap is one of the very first examples of an AMM, or an automated market maker.

One of the best known AMMs within the crypto community till date, Uniswap uses this formula for its automated exchanges: X x Y = K.

Uniswap seeks to address the myriad issues that plagued previous decentralized exchange sites.

Uniswap, for example, uses automated methods to address liquidity problems.

The platform keeps crypto trades automated and open to everyone with Uniswap crypto tokens.

Furthermore, the Uniswap exchange eliminates the need for users to verify their identities, allowing them to build their own liquidity pools for any pair of crypto tokens.

Uniswap incentivizes user engagement by eliminating related risks and lowering trading costs for all parties involved because it automates the market making process.

What is PancakeSwap?

A decentralized exchange running on the Binance Smart Chain, PancakeSwap, like Uniswap, is an automated market maker that lets users trade crypto tokens, provide liquidity to the platform through yield farming, and generate passive income in return.

As mentioned before, PancakeSwap was introduced in the September of the year of DeFi.

It enables the swapping of BEP-20 tokens – BEP-20 is a token standard not much unlike Ethereum’s ERC-20.

PancakeSwap allows users to deposit their crypto tokens into the platform’s liquidity pools in exchange for LP tokens, or liquidity provider tokens; these LP tokens are referred to as FLIP.

Liquidity providers will later use these LP tokens to recover tokens deposited in each of the pools, as well as a portion of the PancakeSwap fees.

PancakeSwap allows the yield farming of its native governance token, CAKE. Wrapped Bitcoin, BUSD, CAKE, and ALPACA are some of the top trading cryptocurrencies on PancakeSwap.

What is Venus?

Also built on the Binance Smart Chain, Venus is an algorithmic money market and synthetic stablecoin protocol.

The protocol aims to simplify DeFi lending and borrowing, and enable users to borrow against collateral instantaneously while paying the minimal  transaction costs.

Venus issues VAI tokens, the protocol’s first synthetic stablecoin tethered to the US dollar’s value (USD).

VAI tokens are BEP-20 tokens that have been generated artificially.

By depositing at least 200 percent collateral to the Venus smart contract, users can produce VAI stablecoins in seconds.

The XVS token serves as Venus’ governance token.

The Venus platform is completely regulated by the Venus platform governance.

Now that we’ve covered the fundamentals of the Uniswap, Venus, and PancakeSwap platforms, let’s compare and contrast some of their features.

Venus vs PancakeSwapVs Uniswap

  1. TVL (Total Value Locked)

When it comes to Uniswap vs Venus vs Pancake, let’s first consider the TVL.

In terms of the total value locked in the platforms, Uniswap is definitely ahead of the other two; however, PancakeSwap and Venus, respectively, are still following close behind.

The total value locked in the Uniswap exchange is over $7.6 billion as of April 2021.

The TVL for PancakeSwap is near $6.5 billion, while the total value locked in Venus is almost $4 billion.

  1. How The Platforms Work, and Some of Their Features

We’ll compare the platforms’ workings in the next section of our Venus vs PancakeSwap vs Uniswap comparison.

PancakeSwap was influenced by the Uniswap exchange, so they have a lot of similarities in terms of features and functionality.

Uniswap’s underlying code is referenced in PancakeSwap’s code.

As we’ve seen, both platforms use automated market maker (AMM) models, so liquidity pools replace order books on both platforms.

A consumer can earn passive income on both Uniswap and PancakeSwap by being a liquidity provider and adding their crypto coins to the platforms’ liquidity pools.

Pancakeswap, on the other hand, has a few features that the Uniswap exchange does not.

PancakeSwap, for example, has two built-in yield farming tools: users can stake liquidity provider tokens (FLIP) to earn CAKE, or stake CAKE they already own to earn more CAKE or other BEP-20 tokens on the platform.

The CAKE token has a wide range of applications, which we’ll go into later.

Aside from yield farming software, Pancakeswap also offers an initial farm offering, which enables users to exchange their liquidity provider tokens for tokens from another cryptocurrency project.

PancakeSwap is also unique in that it incorporates gamification through the development of group teams, leader boards, and numerous tasks that reward players.

When it comes to Venus, the decentralized exchange’s strength lies in its reliability and lightning-fast transaction rates, as well as its ultra-low transaction costs.

The platform offers users instant loans from its liquidity pool, where a group of Venus users deposit the cryptocurrency they own and are compensated by the protocol for serving as liquidity providers.

Borrowers’ loans on the Venus platform are backed by the over-collateralized deposits they make on the platform.

Customers who obtain liquidity via the Venus platform are not expected to pass a credit check; instead, by interacting with the Venus decentralized application (dApp), they can obtain loans more quickly.

What’s unique about Venus is that, since there are no centralized authority figures or intermediaries overseeing the exchanges on the platform, users can deposit on or borrow loans from the platform regardless of their geographic locations, credit ratings, or any other factor that slows down the conventional lending/borrowing process, and they’re free to acquire liquidity by depositing ample collateral whenever they want.

Further, to avoid any sort of market manipulation attacks, the Venus Protocol makes use of price feed oracles.

  1. Native Token and Price Performance

In the Uniswap vs Venus vs PancakeSwap debate, we’ll look at native tokens and their price output as of April 2021.

Of these three platforms’ native tokens, PancakeSwap’s primary currency, CAKE, has seen the most use cases so far.

CAKE is a governance token that can be used for farming and staking, among other things.

The main purpose of PancakeSwap’s CAKE is to encourage liquidity providers to provide liquidity to the PancakeSwap network.

Users will use their CAKE tokens to purchase lottery tickets, giving them a chance to win the entire pot of CAKE used in each lottery round.

Users may also win non-fungible tokens, or NFTs, which can be exchanged for more CAKE tokens or stored in a wallet.

The CAKE token essentially gives users the opportunity to further invest, and increase their returns in the future.

Then there’s Venus’s native utility token, XVS, which also acts as a governance token.

Users may purchase XVS on cryptocurrency exchanges or receive XVS directly from the Venus platform by mining the ecosystem.

Holders of XVS will vote on a variety of proposals and changes to the Venus platform, such as including new asset categories as leverage, modifying contract terms, and organizing product development.

Finally, there’s Uniswap’s native token UNI, airdropped to the initial users of the Uniswap platform back in September 2020. So far, the only use case of the token is in platform governance.

You can see how the tokens have performed so far in 2021, as well as the Pancake, Venus, and Uniswap market caps in the following pictures:

 

As you can see, in terms of Uniswap vs Venus vs PancakeSwapmarket caps, both CAKE and XVS have room to grow due to their smaller market caps.

However, since Uniswap’s UNI token doesn’t have any clear functions except governance yet, CAKE and XVS both are expected to pick up speed in the upcoming days.

  1. Adoption Rate, and Number of Users

When judging Venus vs PancakeSwapvs Uniswap in terms of the number of users, it’s important to consider that the Uniswap exchange had had almost two extra years to build a larger community, and already has a considerable user base.

As of June, 2020, Uniswap already had nearly 1 million unique wallet addresses interacting with the platform.

However, both PancakeSwap and Venus’s adoption rates are on the rise; the number of monthly users Pancake has witnessed in the last thirty days has been 351,908, while for Venus it’s been 24,056.

While it’s going to take Venus longer to attain the kind of user base PancakeSwap or Uniswap boast, Pancake seems pretty close to getting ahead of the Uniswap exchange.

After all, looking at Pancake’s price performance, there appears to be a greater user demand for CAKE than UNI.

  1. Transaction Costs

In the Venus vs. PancakeSwapvs. Uniswap contrast, Uniswap loses the fight due to transaction costs.

Since the Uniswap exchange runs on the Ethereum blockchain, gas fees have been steadily increasing, eroding users’ income.

The Binance Smart Chain, on the other hand, allows for faster transactions on both Pancake and Venus.

  1. Number of Listed Tokens

Next we’ll consider the number of listed tokens on the exchanges in the Uniswap vs Venus vs PancakeSwap debate.

Uniswap is without a doubt the clear winner here; the platform has listed over 1,600 crypto tokens so far, while Pancake has around 200, and Venus has even less.

  1. Liquidity and Trading Volumes

We have liquidity and trading volumes on the exchanges as our final point of reference in the Venus vs PancakeSwapvs Uniswap comparison.

Liquidity on PancakeSwap and Venus is increasing, but the Uniswap exchange remains well ahead of both.

As previously mentioned, Uniswap has a much greater number of tokens listed, and the majority of these tokens have significant liquidity as compared to those Pancake or Venus.

However, when it comes to the trading volumes, PancakeSwap has already passed Uniswap’s one-day trading volume.

It’s important to note that the Binance Smart Chain generated about $15 billion in total transaction volume in January 2021, and Venus and PancakeSwap were two of the biggest contributors by generating respectively $14 billion and $1 billion.

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