The crypto industry has been growing in fame lately, with an increasing number of individuals putting their money into digital coins. Due to this, multiple crypto exchanges and trading platforms have surfaced, among them being Uniswap and Pancakeswap—both of which operate as decentralized exchanges (DEXs).
These platforms let traders swap cryptocurrencies without the need for middlemen, giving them complete authority over their funds. Still, each of them carries distinct characteristics and advantages that might be more appealing to certain users over others.
Confused between Pancakeswap or Uniswap? In this write-up, we are going to explore how Uniswap and Pancakeswap differ from each other and assist in figuring out which one would suit your crypto trading preferences the most.
Uniswap vs Pancakeswap: Key Differences and Similarities
| Measures | Uniswap | Pancake Swap |
| Launch Year | 2018 | 2020 |
| Blockchain | Ethereum | Binance Smart Chain |
| Liquidity Pools | Yes | Yes |
| Token Support | ERC-20 | BEP-20 |
| Transaction Fees | high as a result of Ethereum network congestion | reduced as a result of the reduced transaction costs for Binance Smart Chain |
| Trading Volume | Very High | High |
| Trading Interface | easy to use | UI that is simple to use and intuitive |
| Governance | Uniswap DAO, which allows holders of UNI tokens to vote on platform modifications | Partially centralized |
| Security | High | High |
| Innovation | invented the automated market maker (AMM) concept. | Staking pools, liquidity farming, and lotteries |
| Cross-chain Support | Restricted support for cross-chain | High |
What is Uniswap?
Uniswap is a decentralized exchange (or DEX) that runs on the Ethereum blockchain. It popped up in 2018 and quickly became popular because it’s super simple to use. Plus, it has this cool way of automatically providing liquidity for different token pairs. Now, it’s one of the biggest DEXs out there, with over $1 billion in trades happening each day.
Key Features
Here’s what makes Uniswap stand out:
- AMM System: It uses an automated market maker (AMM) for trades. Instead of using traditional order books, Uniswap uses math to figure out token prices based on how much of each token is available.
- Decentralized: Uniswap is totally on the Ethereum blockchain, so no one is in charge. Everything goes through smart contracts, making it open and safe.
- Liquidity Pools: People trade using liquidity pools. Anyone can add tokens to these pools and get LP tokens that show their share. When people trade, they pay a small fee that’s split between those who added to the pool.
- No Fees to List: Unlike regular exchanges, Uniswap doesn’t charge fees to list tokens. That makes adding coins cheaper and easier for new projects.
- UNI Token: Uniswap has its own token, UNI, that lets people vote on project stuff and earn some of the trading fees.
- Metamask Friendly: Uniswap works great with Metamask, a popular Ethereum wallet. This keeps your trades secure and simple, right from your wallet.
- DeFi Integration: The exchange works with other DeFi platforms such as Compound, Aave, and MakerDAO. This allows for easy trading and shared liquidity across platforms.
- Always Improving: Uniswap is always getting updates. The release of V3 in May 2021 brought concentrated liquidity and different fee options, giving liquidity providers choices.
What is PancakeSwap?
It’s a type of exchange that lets you trade different cryptos without a middleman. It’s built on the Binance Smart Chain (BSC). You can also earn CAKE, which is their own crypto coin, as a reward. It started in September 2020 and got popular real fast because it doesn’t cost much to make trades and there’s plenty of crypto available to trade there.
Key Features
- Automated Market Maker (AMM): It uses smart contracts and pools of tokens to make trades happen, ditching the old order book setup.
- Cheap Trades: PancakeSwap is cheap. They only charge 0.2% per trade (even less, 0.17%, if you hold CAKE tokens). And, because it’s on Binance Smart Chain, you don’t have to stress about crazy gas fees.
- Yield Farming: You can stash your crypto in these pools and get CAKE tokens as a reward. You can even make more by adding tokens to the pool and staking your CAKE.
- NFT Marketplace: They have PancakeSwap Collectibles, which is an NFT marketplace where you can buy, sell, and trade NFTs right there.
- Easy to Use: The whole thing is simple and easy to understand, so it works great whether you’re just getting started or you’ve been trading for years.
- Security: They take security seriously with audits on their contracts and stuff like two-factor authentication to keep your money safe.
Comparison Between Uniswap and PancakeSwap
| Comparison | PancakeSwap | Uniswap |
| 1. User Interface | Sleek, beginner-friendly, and easy to navigate. Users can quickly check token prices and liquidity. | Slightly cluttered, which may overwhelm new users. However, it of |
| 2. Supported Cryptocurrencies | Supports Ethereum-based and Binance Smart Chain-based tokens, offering a wider range of assets. | Limited to Ethereum-based tokens, restricting the variety of cryptocurrencies available for trading. |
| 3. Fees | Has a lower 0.25% trading fee, with 0.17% going to liquidity providers. Fees are taken in the token being received. PancakeSwap is cheaper, especially for smaller trades, because BSC’s transaction fees are much lower than Ethereum’s gas fees. | Charges a 0.3% trading fee, split between liquidity providers and the platform. The fee is taken in the token being traded. |
| 4. Liquidity | Still growing, but liquidity is lower compared to Uniswap, which can lead to higher slippage and slower trade execution. | Has a larger and more established liquidity pool, resulting in lower slippage and faster trade execution. |
| 5. Security | Both platforms are decentralized and do not store users’ funds or data. However, smart contract risks remain a concern. | Both have undergone audits and run bug bounty programs to enhance security. |
| 6. Governance | Uses a community-driven model where users can submit and vote on proposals using CAKE tokens—allowing greater user participation in decision-making. | Governed by UNI token holders, who vote on proposals and upgrades. |
| 7. Liquidity and Trading Volume | Growing rapidly, especially within the BSC ecosystem, and has seen significant increases in trading volume. | Historically, it has higher trading volumes and consistently ranks among the top DEXs. |
| 8. Transaction Speed & Costs | Offers faster transactions and much lower fees—often just a few cents per trade. | Faces high gas fees, which can reach hundreds of dollars, making small trades less profitable. |
Final Thoughts: Which is Better-Pancakeswap or Uniswap?
Choose Uniswap if you prefer a wider range of tokens, are comfortable with Ethereum’s ecosystem, and value its community-driven governance.
Choose PancakeSwap if you want lower transaction fees, faster trades, and a more cost-effective trading experience on Binance Smart Chain.
Regardless of your choice, always exercise caution when trading cryptocurrencies. While decentralized exchanges offer more control over your funds, they can still be vulnerable to smart contract bugs and hacking risks. Always keep your assets secure and stay informed about potential threats.
ZenLedger can help you easily calculate your crypto taxes, and also find opportunities for you to save money and trade smarter. Get started for free now or learn more about our tax professional prepared plans!
Disclaimer: This material has been prepared for informational purposes only, and is not intended to provide tax, legal, or financial advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.
