Key Takeaways
- Last week, the Pancakswap DEx was deployed on Base.
- Meanwhile, Uniswap is making moves to expand its own multi-chain offering.
- As the two rival exchanges expand across blockchains, they increasingly breach once-clear territorial boundaries.
In the race to bring decentralized finance (DeFi) to different blockchains, the two largest decentralized exchanges (DEx)— Uniswap and PancakeSwap—have been doubling down on multichain expansion.
The recent deployment of PancakeSwap on Base means the DEx is now live on eight separate networks. Meanwhile, Uniswap V2 is one step closer to branching out from its native Ethereum.
The Rise of Multichain DeFi
In the world of DeFi, Uniswap was a pioneer when it launched in 2018. When PancakeSwap hit the market two years later, it was initially little more than a BNB Chain-based clone of Uniswap’s Ethereum-based exchange.
But in the years since, the two platforms have diverged on everything from products and services offered, to the way they are governed.
In its latest deployment, last week, the PancakeSwap went live on the Coinbase-incubated Layer 2 Base.
Versions of PancakeSwap can now be found on the BSC, Ethereum, and Aptos Layer 1 blockchains. As well as Base, it has also been launched on other Ethereum Layer 2s, including Polygon, ZKSync Era, Arbitrum One, and Linea, resulting in a total of eight distinct Layer 1 and Layer 2 deployments.
Uniswap V3, on the other hand, has been deployed on Arbitrum, Avalanche, Base, BNB Chain, Celo, Optimism and Polygon.
For the older Uniswap V2, three years since its launch, the community has recently voted to deploy the protocol on all chains currently supported by Uniswap V3.
DEx Competition Heats up in the Multichain Era
As they have expanded beyond their native blockchains, Uniswap and Pancakeswap have inevitably started to step on each other’s toes.
In the early days of DeFi, things were more simple. To perform transactions on Ethereum, Uniswap was the obvious choice. Meanwhile, PancakeSwap offered an alternative for people who wanted to trade on BNB Chain, with its distinct token offerings.
Now, however, Uniswap has expanded to BNB Chain and PancakeSwap has been deployed on Ethereum. In other words, exchanges that once operated in distinct spheres now compete directly for users.
As things stand, Uniswap remains the most popular decentralized exchange, accounting for nearly an 80% share of the market by trade volume. PancakeSwap is currently the second-most popular DEx, with a 20% market share.
But at times in the last year, PancakeSwap’s market share has swollen to above 30%, while Uniswap’s has been known to fall below 50%.
Of course, the decentralized finance will inevitably evolve. As demand for multichain DeFi solutions grows, alternative blockchain deployments are emerging as a key battle line in the competition for users.
Just because Uniswap is on top today, that doesn’t mean PancakeSwap or another competitor couldn’t usurp the market leader in the future.
After all, over the years, the landscape of crypto trading has been dramatically reshaped by the rise and fall of various exchanges.
If there is a lesson to be learned from the fall of one-time giants like Mt. Gox and FTX, it is that no platform is ever secure in its dominance, and if, for any reason, an exchange should lose its position in the market, the next contender is already waiting in the wings.
James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
