CAKE, the utility token of the decentralized exchange, PancakeSwap, remains under pressure days after the Uniswap community voted to launch the exchange on the BNB Smart Chain (BSC), a smart contracting platform.
Uniswap v3 went live on the BSC on March 15, bringing stiff competition to PancakeSwap, which has long been dominant on the smart contracting platform. It also marks the first time Uniswap went live on one of the most active blockchains.
Uniswap is now live on @BNBCHAIN 🔶🦄https://t.co/LWPd2TE1x4 pic.twitter.com/j6aJpoG87z
— BNB Chain (@BNBCHAIN) March 15, 2023
According to coin trackers on March 30, CAKE is changing hands at $3.6, stable on the last trading day but down roughly 22% from February peaks.
Notably, CAKE posted sharp losses on February 9. On this day, the Uniswap community voted to deploy Uniswap v3 on the BSC for the first time.
Uniswap Versus PancakeSwap
Uniswap is a decentralized exchange that is also one of the most popular DeFi dapps, trackers on March 30 indicate.
DeFiLlama data shows that Uniswap has a total value locked (TVL) of $3.86 billion and is dominant on Ethereum, where it facilitates the trading of ERC-20 tokens.
Related Reading: PancakeSwap TVL Drops 12%, Did This Exchange Received A Lethal Blow?
Compared to others, Uniswap is the fifth largest dapp only after Lido Finance, a liquidity staking protocol; MakerDAO, a decentralized money market; Aave, a lending and borrowing protocol; and Curve, a platform for trustlessly swapping stablecoins.
PancakeSwap is the second largest DEX with a TVL of $2.48 billion as of writing. The exchange is deployed on the BSC and Ethereum. However, on BSC, where Uniswap v3 was recently launched, PancakeSwap is the most dominant, with a TVL of $2.43 billion. Even though weekly trading volumes have contracted by 29%, the DEX is popular with token traders on BSC.
Meanwhile, Uniswap didn’t start strongly as anticipated on BSC. Instead, Uniswap is the fourth largest DEX after PancakeSwap, Level Finance, and DODO, managing $10.43 million of assets.
CAKE Is Down 22% From February 2023 Highs
PancakeSwap’s dominance is not helping CAKE prices that remain under pressure. CAKE is perched at 69th on the market cap leaderboard.
Since CAKE’s value is pegged to the DEX’s activities and given how providers supply liquidity to its pool, the token’s overall valuation could be impacted should Uniswap’s TVL rise in BSC. In that case, traders would prefer to trade on Uniswap, an interoperable protocol available on several platforms, including Celo and Algorand, over PancakeSwap, that’s only on BSC and Ethereum.
While the Uniswap v3 Business Source License (BSL) expires on April 1, PancakeSwap v3 is set to be released next month. With the expiry of the Uniswap v3 BSL, any developer will be free to fork their code.