With transaction fees on Ethereum hitting peak levels, crypto traders and yield farmers are flocking to alternatives that are seeing a surge in volumes and token prices.
PancakeSwap is an automated market maker, similar to Uniswap, but based on Binance Smart Chain (BSC) and its BEP20 token standard. It is, therefore, not plagued by those painful gas fees that current Ethereum Layer 1 platforms are suffering.
According to a tweet on February 10, it has surpassed SushiSwap and is second to Uniswap on CoinGecko’s DEX rankings in terms of 24-hour volume, which is currently over $535 million.
The platform’s own statistics dashboard reports current liquidity at a record $835 million, up 34% over the past 24 hours.
Alternatives To Ethereum L1
The number of alternatives to Ethereum-based protocols is increasing, and, just like the Pancake, they are enjoying a boost in volume and token prices as DeFi farmers shy away from ETH-eating transactions.
Binance CEO Changpeng Zhao declared that his exchange’s blockchain has now flipped Ethereum in terms of transactions, which is good news for the DeFi minnows if true.
The Block’s research director, Larry Cermak, pointed out that to really compete with Ethereum-based platforms, BSC needs more assets;
“The main challenge for BSC will be the assets available. Sure, Binance has a decent bridge but so many of the DeFi projects rely on the breath of assets that can be used for collateral. Unless that happens natively, it’s gonna be hard to compete IMO,”
Referring to PancakeSwap, he added that it is what happens when on-chain transactions get too expensive for opportunity-seeking retail traders.
In addition to BSC, other alternative, such as the NEO-based Flamingo Finance and Layer 2 DEX Loopring, are also seeing surges in trading volumes as the gas crisis intensifies. On February 9, Loopring reported a record 40,000 transactions for the day as Layer 2 momentum grows.
PancakeSwap’s native governance and staking token, CAKE, has exploded in price with a monumental 65% gain, reaching an all-time high of $7.70. It has since cooled down a bit and is now trading at $6.73.
CAKE, which is distributed as a staking reward to liquidity providers, has made 225% since the same time last week and over 1,300% on the month. Its current circulation is 112.8 million, giving the asset a market capitalization of $759.8 million.