PancakeSwap is a decentralized exchange (DEX) launched on the Binance Smart Chain (BSC) by anonymous developers with an apparent obsession with bunnies and breakfast foods.
But believe it or not, PancakeSwap is no joke.
Whether you’re a seasoned veteran or relatively new to the wild-west of crypto, you will most likely be surprised to hear that almost all decentralized finance (DeFi) applications lived almost exclusively on the Ethereum (ETH) network.
That is, of course, until the fabled release of PancakeSwap a mere nine months ago, with the nifty DEX launching late last September.
A Brief History of the PancakeSwap DEX
PancakeSwap launched late last year in September of 2020 to little fanfare. As mentioned earlier, the PancakeSwap DEX, along with its native token known as CAKE for short, is a BSC-based project with a team of anonymous developers.
At the time of PancakeSwap’s launch, the Ethereum network suffered (as it often has in recent times) from expensive and slow transactions, with DeFi’s mainstream moment last year driving massive demand, resulting in unprecedented network stress.
To the dismay of users, all of this unprecedented traffic meant new all-time-high fees. Thus, it should come as no surprise that PancakeSwap saw rapid growth in trading volume and total value locked (TVL) until about late February of this year.
After this meteoric rise from obscurity to the limelight, the platform would, at last, be standing toe-to-toe with automated market-making (AMM) pioneers like Uniswap and 1inch.
PancakeSwap, SushiSwap, & Uniswap
Unlike traditional exchanges, a DEX does not rely on an order book for liquidity, and much like the SushiSwap platform, and many more like it, PancakeSwap is a DEX that utilizes an AMM system.
And while the DEX was supposed to be a direct competitor to the unequivocally popular Uniswap (UNI) platform, the PancakeSwap DEX does look a bit like its forefather, SushiSwap.
You might even be surprised to learn that PancakeSwap is, in fact, a fork of the SushiSwap DEX with an almost identical codebase, only with the advantage of cheaper and faster transactions due to being built on the BSC.
PancakeSwap even offers additional features otherwise not available on its competitors’ platforms. These include features such as yield farming, a lottery, and initial farm offerings (IFOs).
Last but not least, in addition to these exclusive features and cheaper network fees, PancakeSwap also offers a lower, more attractive swap fee of 0.2%, while the industry standard is 0.3%.
In less than one year, PancakeSwap has become one of the industry’s largest decentralized exchanges by trading volume and TVL.
While many overlooked and were even critical of the DEX at the time of launch, investors are finally coming around to the advantages afforded to users when using the PancakeSwap DEX over the more popular solutions available.
PancakeSwap is not a force to be underestimated – the up-and-coming competitor to DeFi heavyweights like Uniswap, 1inch, and SushiSwap features several upgrades that remain exclusive to the platform, along with a friendly user interface that even the most inexperienced user can figure out relatively quickly.
Simply put, it is truly a remarkable accomplishment to achieve what PancakeSwap has managed in less than a year – we look forward to seeing what’s next in store for the not-so-little-DEX that could!
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