What is Uniswap (UNI)?

A closer look:

Uniswap was developed by Hayden Adams and is one of the most popular Ethereum-based Decentralized Exchanges, an automated liquidity protocol, offering users a safe and easy-to-use decentralized platform that offers high liquidity. Using Uniswap, people can easily swap ERC-20 tokens from their personal wallets in a trust-less way, relying on Uniswap to provide the best price discovery. Uniswap doesn't rely on an order book model, but Uniswap's Automated Market Maker (AMM) searches for the best bids and offers in its two reservoirs of liquidity.

Uniswap is built on Ethereum in the form of a factory smart contract, containing an exchange register, and an exchange smart contract, containing data from a particular ERC-20 token. It aims to offer a faster way to swap tokens within the Ethereum ecosystem, yet relies on other exchanges to stabilize prices by arbitrage, when there is a misbalance on its platform.

Fees:

• ETH to ERC-20 trades – 0.3% fee paid in ETH.
• ERC-20 to ETH trades – 0.3% fee paid in ERC20 tokens.
• ERC-20 to ERC-20 trades – 0.3% fee paid in ERC-20 tokens for ERC-20 to ETH swap on input exchange; 0.3% fee paid in ETH for ETH to ERC-20 swap on output exchange; effectively 0.5991% fee on input ERC-20.
• When swapping ERC-20 tokens on Uniswap, the user is charged with a 0.30% fee, which is in return distributed to the people who provide liquidity by contributing to liquidity pools.
• The more problematic fee is the transaction fee, which can move much higher when the Ethereum network is congested, which sadly is often the case, due to Ethereum's inability to scale its network.

Wallets:

Uniswap supports the following wallets: MetaMask, WalletConnect, Coinbase Wallet, Fortmatic and Portis, as well as mobile wallets Trust Wallet and Coinomi.

Uniswap's goal:

Uniswap aims to become 'the' whale-resistant, cheap, and available-to-anyone decentralized exchange that offers its userbase the ability to swap any ERC-20 token at lightening speed.

What is Pancakeswap (CAKE)?

A closer look:

Pancakeswap is the most popular Binance Smart Chain Decentralized Exchange for swapping BEP-20 tokens. Similar to Uniswap it uses an Automated Market Maker (AMM) model and liquidity pools, offering users the best price when swapping. Users who offer liquidity are rewarded with LP tokens, which can be used to reclaim their share within the liquidity pool they supported.

Furthermore, Pancakeswap allows users to farm additional tokens: CAKE and SYRUP. For staking LP tokens, users are rewarded with CAKE tokens, and when staking CAKE tokens they are rewarded with SYRUP tokens. Those tokens have governance functionality and lottery use cases.

Fees:

Pancakeswap charges a 0.2% fee. Other than that it operates on the Binance Smart Chain, instead of on the costly Ethereum network.

Wallets:

Pancakeswap supports the following wallets: MetaMask, TrustWallet, TokenPocket and WalletConnect.

Pancakeswap's goal:

Pancakeswap is successfully taking over an ever bigger chunk of the Ethereum DeFi ecosystem, offering users affordable fees, which has been Ethereum's Achilles heel for years.

Why will we undergo a swappening?

Despite Ethereum's number two spot measured by market capitalization, it's Decentralized Exchange Flagship, Uniswap, is now being targeted by crypto entrepreneurs who see significant market opportunities by offering people similar products, yet with affordable fees. Pancakeswap does just that and will most likely become much more popular as we move further into 2021.

As of today, Uniswap has a market capitalization of $7,727,627,733 and a volume of $1,227,132,629. Pancakeswap has a market capitalization of $1,392,645,703 and a volume of $328,995,764.

Despite Uniswap's strong leader position, I believe that more and more users are actively searching for ways to escape Ethereum's highly overrated fees, which have put a painful strain on many of its ecosystem's projects. I therefor predict a significant change in the smart contract landscape, with Pancakeswap but also other big chains such as Cardano, Polkadot and Ripple's smart contract plans, throwing Ethereum of guard.