Through these exchanges, individuals can swap one token for the other, lend or stake their cryptocurrencies and earn rewards through permissionless liquidity protocols. Among the popular DEXs available are PancakeSwap and Sushiswap.
PancakeSwap and Sushiswap are both forks for UniSwap, another popular De-Fi exchange. Both DEXs are not only types of cryptocurrency exchanges used for swapping crypto assets between different types of blockchains but are also Automated Market Maker (AMM) models as well.
As AMM models they allow users to trade digital assets in a permissionless and automatic way through the use of liquidity pools rather than the traditional market for buyers and sellers. Users on the AMM platforms provide liquidity pools by depositing their crypto tokens and earning rewards.
PancakeSwap is a decentralized exchange, built on the Binance Smart Chain (BSC). It allows users to trade tokens while keeping custody of their assets, all without the need for a centralized intermediary.
The platform was built by anonymous developers and was launched in September 2020. As mentioned earlier, PancakeSwap uses an Automated Market Maker (AMM) model which means they have liquidity pools where you can swap crypto tokens via smart contracts.
Taking the number one position in the list of top crypto DEXs, the platform has a trading volume of $1.83 billion.
The liquidity pools on PancakeSwap are known as SYRUP pools while its native token is called CAKE, which is a BEP-20 token. PancakeSwap is the biggest and most frequently used AMM project on BSC for both yield farming and staking of tokens.
Features of PancakeSwap
PancakeSwap allows users to connect to its DEX using wallets like Trust Wallet, MathWallet, and Binance Chain Wallet. The platform supports the popular Ethereum wallet, MetaMask, even though it has to be configured to work with Binance Smart Chain.
The platform allows users to provide liquidity for the Syrup pools. They can deposit funds into any of the available liquidity pools and receive a Liquidity Provider (LP) token as a reward. return.
PancakeSwap has a trading feature that allows users to swap or trade the LP tokens they receive for profits.
On the platform, you can carry out field farming. You can start by clicking on the “Farms” tab first, then select, out of the numerous pairs, the one that matches your LP tokens. Then you approve the contract to complete the movement of BEP-20 tokens, select the number of tokens you want to stake, and when you are ready to collect your tokens you can harvest them off the platform.
You can stake tokens on the platform by depositing your crypto into any Syrup pool. The longer a user leaves their crypto on the platform, the higher the reward the user receives.
You can enter a lottery on PancakeSwap to win rewards if some or all of the random four-digit combination of numbers you are given, from 1 to 14, matches the four numbers in the winning ticket.
PancakeSwap also has an initial farm offering (IFO) launchpad where users can invest in new crypto projects before they become publicly available.
You can win an NFT and exchange it for CAKE tokens or save it as a collector’s item.
Sushiswap is an Ethereum-based decentralized exchange that was launched in August 2020 by the pseudonymous entities known as Chef Nomi, Sushiswap, and 0xMaki, also known as Maki.
Later on, the de facto ownership of the DEX was passed to Sam Bankman-Fried, CEO of derivatives exchange FTX and quantitative trading startup Alameda Research after he transferred almost $1 billion from Uniswap to Sushiswap.
Taking the 8th position on the list of top crypto DEXs, the platform has $228 million in daily trading volume. Like PancakeSwap, Sushiswap is also an AMM model. The governance token on the platform is called SUSHI.
Features of SushiSwap
Users can connect to Sushiswap using wallets such as MetaMask, WalletConnect, Lattice, and Coinbase Wallet.
Users can swap or trade one token for another on the platform. For instance, you can exchange your USD Coin (USDC) with Ethereum (ETH).
Its governance token, SUSHI, is a freely tradable token that can also be found on Coinbase, Binance, Bitfinex, FTX, Gemini, Kraken, etc, and traded on SushiSwap, Uniswap, or 1inch.
On SushiSwap, you can farm tokens by depositing crypto into any of the liquidity pools to earn rewards. In the liquidity pools, there are two or more cryptocurrencies, therefore the user has to deposit an equal amount of each crypto.
You can also stake your Sushi tokens by depositing them to earn rewards.
Sushiswap platform also allows users to borrow crypto with collateral and lend out crypto to earn interest on it.
Sushiswap has MISO, short for Minimal Initial Sushiswap Offering, a set of open-source smart contracts that makes the launching of a new project on the exchange easier.
PancakeSwap Vs Sushiswap Conclusion
Since the two decentralized exchanges are both forks of Uniswap, they clearly have some similar features.
However, they also have unique and distinctive features that make them different from each other.
These features have made one DEX a better choice than the other for some groups of people. The decision to choose either of the two DEXs depends solely on individuals; the exchange they are more comfortable with or one whose feature favors them.
Being built on Binance Smart Chain means that users pay lesser network fees when using PancakeSwap. On the other hand, Sushiswap’s main platform is built on the Ethereum network where fees are higher, while the BSC-version is not as popular.
In terms of trading fees, PancakeSwap also has an edge as fees are only 0.2% but 0.3% for SushiSwap.
Users of SushiSwap that possess the platform’s native token, SUSHI, can propose changes on the platform and vote on proposals submitted by other users. This feature is also available on PancakeSwap, although in most cases, the project team proposes changes for users to vote on.
By going through this article, you’re probably in a better position to choose which platform could work best for you as you explore DeFi.