A relative newcomer in the decentralized exchange (DEX) space is witnessing massive trading volumes, with its native token skyrocketing as high as 1,463% in the past month.
PancakeSwap (CAKE), which launched in late 2020, and is now the third-largest DEX with more than $444 million in daily trading volume at time of writing, according to CoinGecko, putting it ahead of its popular competitor SushiSwap by roughly $25 million.
PancakeSwap, which is run on smart contract platform Binance Smart Chain, offers traders a cheaper alternative to Uniswap, which is currently dealing with enormous Ethereum gas fees.
Because PancakeSwap is not running on Ethereum, it does not offer access to native ERC-20 assets and instead features BEP-20 assets built on Binance Smart Chain.
Crypto analyst Nicholas Merten says he’s impressed by the project, but recommends investors wait to see if the DEX’s astronomic rise in value is a result of hype, and consequently temporary.
“I have to say the really positive thing here is that Pancake Swap has dominated the Binance Smart Chain ecosystem. It’s really nice to see some more competition come into this space, something that’s much more affordable to the everyday user – I will give it that. And I have to be honest, I definitely missed the train on this… There’s a lot of things we called right this year, but I really didn’t see the Binance ecosystem picking up as much as it has, so I have to give them props in that regard.
The one thing I will say overall is, again, not to get too caught up in a hype here – we want to see if it’s going to sustain here. We want to see more liquidity coming in. But I will say the one thing this is shaped up for, especially in this case as everything is developing on the Binance Smart Chain, is it has served as a really big boost for the BNB token in this case as a potential reserve asset, similar to how ETH is the reserve asset for the Ethereum ecosystem.”
As of writing, the CAKE token is trading at $5.96 and is down 11.7% in the past 24 hours.Don't Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
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