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Pancakeswap is surging; Is it the result of the hype surrounding it or it’s here to stay?
Decentralized exchanges allow peer-to-peer transactions of cryptocurrency without using any intermediate, and one of the leading decentralized exchanges is Pancakeswap.
On February 19, Pancakeswap hit a 24-hour trading volume of more than $1.2 billion, and on February 21, it hit a daily trading volume of over $6 billion. The market price of CAKE is $18.14 at the time of writing, with an increase of 14.12% in 24 hours.
Pancakeswap (CAKE) is an Automated Market Maker clone of Uniswap on Binance Smart Chain. For the year 2021, CAKE has seen a growth in liquidity by 1000% to date. On January 1, its trading volume was $37 million, and it has increased to nearly $6 billion till February 21. The price of CAKE has risen by more than 6000% since its release.
CAKE has managed to perform better than Uniswap for few days, and it has become the most used Decentralized Exchanges in few days. Notably, Pancakeswap is based on Binance Smart Chain (BSC), whose native token is CAKE. It is not a DeFi project built on Ethereum Network. One of the important reasons for its outperformance over Uniswap and Sushiswap could be its low trading fees. We know that the Ethereum gas fee is relatively high compared to Pancakeswap, plus later offers quick transactions. According to Changpeng Zhao, CEO of Binance, Pancakeswap on Binance Smart Chain offers nearly 300 transactions per second. On the contrary, Ethereum offers almost 15 transactions per second. Its low fees attract many traders being a cheaper alternative to expensive DEX projects. The demand for CAKE has been increased drastically due to the surge in trading volume for few days.
No doubt that Pancakeswap was started as an imitation of Sushiswap, an Ethereum based decentralized exchange, but Pancakeswap has undoubtedly outperformed its rival this month. More than 176 markets on Pancakeswap, and the CAKE, its native token, has more than $45 million in volume.
Among all the Decentralized Exchanges, Pancakeswap has an enormous trading volume. It seems a good option for traders being a cheaper alternative to the DEX. The project's performance is impressive so far, and it seems to stay here for long despite the hype.