DEX Comparison: Uniswap Vs Venus Vs PancakeSwap

2020 was dubbed the year of DeFi, and it introduced the crypto community to many new and exciting DeFi projects, Venus and PancakeSwap among them. Both of these projects are built on the Binance Smart Chain, the ecosystem that many developers and traders already see as an alternative to the Ethereum ecosystem – which houses many of the popular DeFi projects right now, including the Uniswap exchange. 

The main reason Ethereum is slowly losing its place among crypto traders is its scalability issues, alongside its reliance on the PoW (proof-of-work) algorithm and the high gas fees. The BSC, however, uses a PoSA (proof-of-staked-authority) consensus mechanism, which provides a three-second block time, so transactions get settled faster and the fees are significantly lower. Needless to say, theoretically, the BSC does manage to achieve more efficiency than Ethereum when you compare their features. 

As the hosting ecosystems BSC and Ethereum are being weighed up by the crypto community, it’s no surprise that comparisons between projects like Uniswap, PancakeSwap, and Venus will come up too, especially when these platforms share quite a few similarities. In this post, we’re going to see how the Uniswap v  Venus vs PancakeSwapdebate turns out, but first, let’s take a brief look at each of the three DeFi platforms.   

What is Uniswap?

Built upon the Ethereum blockchain, the Uniswap exchange is one of the most famous projects within the decentralized finance universe, which facilitates automated exchanges of various cryptocurrency tokens. The platform was founded by Hayden Adams, and it was launched back in the November of 2018. 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 aims to solve the various problems that plagued the decentralized exchange platforms that came before it. For example, Uniswap solves the liquidity issues with its automated solutions. The platform keeps crypto trades on it automated and open to any user who holds crypto tokens on Uniswap. Additionally, the Uniswap exchange removes identity requirements for the users on the platform, which allows any of them to create their own liquidity pools for any pair of crypto tokens. Since Uniswap automates the market making process, the platform incentivizes user activity by doing away with associated risks and reducing trading costs for all parties involved. 

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 the crypto tokens they hold into the liquidity pools  on the platform, and receive LP tokens, or liquidity provider tokens in return; these LP tokens are known as FLIP. Liquidity providers can later use these LP tokens to reclaim the tokens they deposited in any of the pools, as well as a part of the PancakeSwap fees generated.

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 mints out VAI tokens, the protocol’s first synthetic stablecoin which is tethered to the value of the US dollar (USD). VAI tokens are synthetic BEP-20 tokens. Users can generate VAI stablecoins within moments by depositing at least 200% collateral to the Venus smart contract. Venus also has the XVS token as its governance token. The governance of the Venus platform is supervised fully by the XVS community members.

Now that we know the basics of the Uniswap, Venus, and PancakeSwap platforms, let’s see how some of their attributes look stacked up against each other, shall we?

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.

2. How The Platforms Work, and Some of Their Features:

For the next point in the Venus vs PancakeSwapvs Uniswap comparison, we’ll compare the workings of the platforms. PancakeSwap was inspired by the Uniswap exchange, so of course they share most of their features, and also how they work. The underlying code of PancakeSwap is referenced from that of Uniswap’s. Both use automated market maker or AMM models, as we have already learned, so liquidity pools replace order books on both the platforms. On both Uniswap and PancakeSwap, a user can generate passive income by becoming a liquidity provider and adding the crypto coins they own to liquidity pools on the platforms. 

However, Pancakeswap does possess a few features that the Uniswap exchange does not. For instance, PancakeSwap has two built-in yield farming tools; users can either stake liquidity provider tokens (FLIP) to earn the native token CAKE, and or stake the CAKE they already have to earn more CAKE or other BEP-20 tokens on the platform. The CAKE token has many usabilites, which we will discuss later on.

Aside from the yield farming tools, Pancakeswap also has this feature known as an initial farm offering; the initial farm offering allows a user to trade their liquidity provider tokens for tokens belonging to some other cryptocurrency project. Another unique thing about PancakeSwap is the aspect of gamification through the creation of community teams, leader boards, and various tasks that reward those who emerge on the top.

Coming to Venus, this decentralized exchange’s strength lies in its efficiency and swift transaction speeds, and of course, the super low transaction costs. The platform provides users with instant loans from its liquidity pool, where a group of users on Venus deposit the cryptocurrency they hold – acting as liquidity providers, and are rewarded by the protocol. 

The loans borrowers take out on the Venus platform are secured by the over-collateralized deposits borrowers make on the protocol. Customers who attain liquidity through the Venus platform are not required to pass a credit check; they can take out loans faster by interacting with the Venus decentralized application (dApp) instead. What’s great about Venus is that since there are no centralized authority figures or intermediaries controlling the exchanges on the platform, users can deposit on or borrow loans from the platform regardless of their geographic locations, their credit scores or any other factor that lengthens the traditional lending/borrowing process, and are free to acquire liquidity by depositing sufficient collateral whenever they please.

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

3. Native Token and Price Performance:

Next we’ll consider the native tokens and their price performances as of April, 2021 in the Uniswap vs Venus vs PancakeSwapdebate. CAKE, PancakeSwap’s primary currency, has seen the most use cases among these three platforms’ native tokens so far. CAKE acts as a governance token, and provides farming and staking functionalities, among other things. Users can earn CAKE by providing liquidity, staking, or buying them from a crypto exchange.

The main function of PancakeSwap’s CAKE is to incentivize the liquidity provision to the PancakeSwap platform. Users can choose to buy lottery tickets using their CAKE tokens, which gives them a chance to win the entire pot of CAKE used in each lottery round. Users also get to win NFTs or non-fungible tokens which can be swapped out for yet more CAKE tokens, or kept in a wallet. The CAKE token essentially gives users the opportunity to further invest, and increase their returns in the future.

Next, we have Venus’s native utility token XVS that serves as a governance token. Users can buy XVS from crypto exchanges, or they can earn XVS directly from the Venus platform through ecosystem mining. The holders of XVS can vote on all kinds of initiatives and adjustments on the Venus platform, including adding new assets as collateral types, changing parameters on the contract, and organizing product improvement.  

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. 

4. 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. 

5. Transaction Costs:

When you consider the transaction costs in  the Venus vs PancakeSwapvs Uniswap comparison, Uniswap loses the battle. As the Uniswap exchange operates on the Ethereum blockchain, gas fees have, of course, only been rising with every passing day, chipping away at the profits of the users. However, along with facilitating swifter transactions on both Pancake and Venus, the Binance Smart Chain lets both platforms offer significantly lower transaction costs.

6. Number of Listed Tokens:

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

7. Liquidity and Trading Volumes:

For our last point of consideration in the Venus vs PancakeSwapvs Uniswap comparison, we have liquidity and the trading volumes on the platforms. The liquidity on both PancakeSwap and Venus is hiking up; however, the Uniswap exchange is still way up ahead of both. Uniswap has a far greater number of tokens listed, as discussed above, and most of these tokens have substantial liquidity next to those on 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. 
And there we have all the points for the Uniswap vs Venus vs PancakeSwapcomparison! There’s, of course, no single winner we can identify here, but we sure hope the data provided helps you decide which platform you’d invest in. For more informative posts regarding cryptocurrencies, options, futures, and crypto trading in general, do give our website a visit!