Introduction

Greetings Steemit Crypto Academy; it is always a pleasure to be here. Thank you dearly professor for this great knowledge through your lecture as well as my research as a result of this homework. Let’s get down to the real deal right away.

Before answering the question properly, it is only normal that we understand what dApps are in the first place.

What are dApps?

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DApps in full is Decentralized Applications. Decentralization means there is no central authority in charge; in simple words there is no middle man. Before now, for a transaction to be processed and confirmed, there was a need for a person to do the confirmation. Today, applications are run wherein transactions are processed and confirmed with no middle man; these applications are known as dApps. Note that dApps are like every other app but for the fact that they run on peer to peer networks like blockchain.

In DApps, no one person has control of the network, as every data as well as record is made available to all that is, it is public and finally, it must be utmost secured therefore the use of cryptography(codes)

Now to our question of the day, I choose Uniswap and PancakeSwap. Let’s ride on together.

Uniswap

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Built in 2018, Uniswap is an automated crypto exchange which runs on Ethereum blockchain; the world’s second largest crypto currency project with its own token known as UNI. This makes it compatible with all ERC-20 tokens as well as infrastructure like wallet services for example MetaMask and MyEtherWallet.

Being fully decentralized, it is a completely different kind of exchange. There is no central authority controlling it. Equally, it is worth knowing that UniSwap uses a relatively new type of trading model known as an automated liquidity protocol.

UniSwap is a Decentralized Exchange. This means that;

• With uniswap, anyone can copy the code to create their own DEX
• Users have access and control to their funds at all times. This is made possible by the private key ownership and possession.
• Users could list tokens on the exchange for free.

Currently, UniSwap is the fourth largest DeFi project with over $3billion worth of crypto assets according to latest statistics.

Below are what we need to know about UniSwap.

• UniSwap is not only a Decentralized Exchange(DEX) but a cryptocurrency as well.
  As a DEX,peer to peer is what is used. All one needs to do is to connect the crypto wallet to the UniSwap app and boom; cryptocurrency trading can commence. In addition, it is different since there is no third party involvement.

• UniSwap is totally open sourced. This means that decentralized trades can be done once the code is reproduced.

• It is also worth noting that Decentralized Finance apps (DeFi) have evolved over the years and UniSwap ranks amongst the biggest based on trading volume.

UniSwap as cryptocurrency means that holders can effect changes in the exchange through voting. However, the focus is on the exchange because the more popular it gets, the more the demand increases and hence it’s value.

• Investment in UniSwap can be done through two major ways. The first is to buy through an exchange just like my other cryptocurrency.

The next method is to trade it. Here, one has to first of all buy a cryptocurrency and transfer it to a crypto wallet. Next is to go to the UniSwap app, connect your wallet and then trade.

• Whether a trader or a liquidity provider, all what is needed is an Ethereum wallet which could be a universal MetaMask or a wallet address.

• To have enough funds, UniSwap rewards it’s users who lend them their crypto thereby increasing their liquidity pool. The contributors to this liquidity pool are rewarded with a share of the gas fee.

• UniSwap operates as an Automated Market Maker(AMM). It offers various pairs of tokens for trade with prices set using mathematical formulas as well as smart contracts.
  It is worth noting that for this to work, a liquidity pool for each pair of exchanges needs to have funds and these funds are obtained when users trade or lend.

• UniSwap has inspired a lot of competitors who operate similarly. A few examples are SushiSwap, PancakeSwap, BurgerSwap, DODO and Curve. One difference and advantage with these other exchanges is that they run on the Binance Smart Chain which have much lower fees compared to Ethereum. A clear example is the Pancakeswap

• Though with great growth prospects,UniSwap is a high risk investment. It is very primordial to understand the risk involved before indulging in the buying process. Just like every other cryptocurrency, there is no guarantee since it is volatile hence your investment could be next to nothing or nothing at all in the nearest future.

UniSwap was built on the Blockchain technology known as Ethereum; It’s users thus pay what is known as gas fee with Ethereum. These gas fees however do not depend on the amount of the transaction but on the congestion at the time of the transaction. This is where a major issue pops up; since Ethereum is most often congested because of its popularity. Imagine paying a $25 as fee for a $50 trade; this actually doesn’t make any sense hence making it a poor choice especially for small amount traders. Notwithstanding, the upgrade is currently ongoing with the hope of drastically reducing both processing time as well as gas fee.

All in all, even with the risks involved there exist several reasons to like UniSwap as an investment. Amongst many reasons, it is leading it’s competitors as it has about 63.8% market share among Decentralized Exchanges. Imagine if the Ethereum 2.0 upgrade goes as expected. Even users who were discouraged due to its processing time and fee drawbacks might return making it even better.

UniSwap makes a lot of sense as a cryptocurrency investment. Always remember that, you could as well lend to the liquidity pool and get rewards if you buy any tokens. Trading is always possible too.

PancakeSwap

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Launched in September 2020 with its native currency known as Cake, PancakeSwap in about a year has seemingly become the most secured and active DEX on the Binance smart chain(BSC) surpassing even its own Binance DEX. It is actually one of the most popular DApps clocking about $100million in a day as trading volume. This automatically means a huge user base.

The team behind this platform is actually anonymous. However, it is known to have been audited by a bunch of blockchain security firms, some of which include Certik and Slowmist. This no doubt is a strong base for its reliability. Also in line with this, it is known that the team is made up of more than a dozen chefs(members), Hops and Thumper(co leads) as well as several engineers.

As an Automated Market Maker(AMM) this platform allows users to safely trade Binance Coin (BNB) and a variety of BEP-30 tokens without any third party involvement. Traders actually do trade digital assets with the use of permissionless liquidity pools.More so being a DEX trades here are executed automatically through what is known as smart contracts. Here, traders draw liquidity automatically from one or several liquidity pools which rebalances once trading is completed. Note that this utility is provided by users who are known as liquidity providers. Once they contribute these amounts, they receive tokens as reward.

PancakeSwap has witnessed remarkable growth not limited to the amount of users as well as the liquidity but also in the variety of features offered. In April 2021it upgraded to V2 giving the developers more freedom for improvement such as adding a referral program and auto compounding.

The native token for PancakeSwap is CAKE. This token is used for several purposes some of which include yield farming, staking, PancakeSwap lottery and voting.

Being a decentralized application,PancakeSwap is accessed supported Web3 wallets like MetaMask, WalletConnect or TrustWallet.

PancakeSwap basically is used for trading and staking.

With trading, it is an exchange and a decentralized one at that meaning it’s basic function is supporting trading in BEP-30 tokens. This therefore means tokens earned can be traded for other BEP tokens. The very good part is that it is speedy and very secure making the transaction experience worthwhile.

As regards staking, it is no news that not everyone can understand the market, trade and make returns. This most often is an advantage that comes with time of study and understanding the market. Therefore newcomers have an earning opportunity through staking. With this PancakeSwap, owners of CAKE can actually stake the token in the syrup pools hence earning rewards. Very interesting is that these rewards could be in CAKE or as other BEP tokens. To stake means to lock in your investment for a stated period of time while being rewarded for providing the token.

PancakeSwap equally allows its users to be liquidity providers by adding their tokens to liquidity pools. Once you become a liquidity provider, you are rewarded in what is known as FLIP tokens. On the other hand, people wanting to use the liquidity pay a fee to the DeFi platform. It is these fees that are later distributed to the liquidity providers after which some have been kept in the treasury for maintenance of the platform.

PancakeSwap is special not only because of its excellent services, low transaction fees and very fast confirmation time but also because it is totally safer to use than some other AMM which have slower processing time. Added to these, this DApp offers a variety of secondary features thereby adding utility to Cake holders. Some of these features are;

Yield Farms

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Here, users become liquidity providers in one of the various yield farms. They do so by staking some tokens in the yield farm and in return, earn CAKE as the reward token. This is actually one of the most profitable ways to earn money on PancakeSwap. Investing and actually waiting for your reward as CAKE is called farming. Reaping your reward is harvesting

Initial Farm Offerings (IFOs)

Here, users are allowed to purchase new early stage tokens even before their public launch. They do this by exchanging their CAKE-BNB liquidity provider tokens. Hot cross,Soteria and Ditto are some examples of projects launched using this method. All what is needed is liquidity tokens from any support pool.

Prediction Markets

This is actually a simple tool which permits the users to predict increases and falls of Binance coin in a time frame of 5 minutes. It is done as a bet and the users actually put their funds into a prize pot which is shared amongst the correct market predictors while losers loss all.

Syrup Pools

Here, users could stake a variety of BEP-20 to get rewards either as CAKE or another reward token.

NFT Collectibles

NFT stands for Non-fungible tokens.
This is a new feature which was added to the PancakeSwap in February 2021. After purchasing one Of the available Bunny NFTs, it allows the users to choose an NFT profile picture. More so users who have completed files are allowed to join a team in which they could participate in various events thereby earning rewards. These earnings or wins could either be used for trading or staking. The Syrup Storm was the most popular as of July 2021.

Community Governance on PancakeSwap

CAKE holders can actually vote on governance proposals. This is so as PancakeSwap is partially governed by the community.
This therefore means, some proposals will be tabled by the PancakeSwap core team and the others by the community.

Lottery

Here, users are allowed to buy lottery tickets in order to take down a large pot of CAKE. The tickets are actually bought with a CAKE token and those who match the win receive the prize.

Some benefits of PancakeSwap amongst others include;

• Easy to use even for beginners. It is very user friendly.

• Fast transaction time

• High privacy

• It is interconnectable as it supports many popular wallets including MetaMask.

• Equally it has several earning options like staking, yield farming, lotteries and so on.

With these explained, it only brings us to the 3rd part of the question which talks on explaining the results of the analysis. To properly analyze, let’s bring out the differences and similarities.

There exists several similarities as well as differences between PancakeSwap and UniSwap

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Similarities between UniSwap and PancakeSwap

1. The first similarity I’ll talk about is that both exchanges are automated market markers.

2. Next is that they are both decentralized exchanges(DEX) meaning there is actually no third party involvement.

3. Both platforms give room to users to become liquidity providers and earn rewards.

4. Again, both exchanges require a browser wallet extension to fully function

5. They are both community driven. This is so because they are community governed as well as supported.

As required, there are some differences between UniSwap and PancakeSwap. They include;

1. The primary difference is that UniSwap operates on Ethereum while PancakeSwap operates on Binance.

2. The native token for UniSwap is the UNI token while they for PancakeSwap is CAKE.

3. Again transaction speed is faster for UniSwap than for PancakeSwap

4. With regards to trading pairs, UniSwap supports more

5. PancakeSwap has additional features such as lottery whereas UniSwap doesn’t

6. The fees in UniSwap are slightly higher than that in PancakeSwap. This is because of higher gas fees.

7. Last but not least, all the fees gotten from UniSwap goes to liquidity providers whereas for PancakeSwap, the fees go to liquidity providers, pancakeSwap treasury and token buyback.

Conclusion

With the world evolving, people are more interested in control as well as privacy. This increased demand in decentralization clearly tells us that Decentralized Finance is here to stay

Also, the world of blockchain is a risky one. There’s no certainty here.Notwithstanding, both UniSwap and PancakeSwap give priority to security.

With all this said, one piece of advice is that people should invest what they can lose and still handle; this is the crypto world.

Thank you so much professor for this great knowledge; I am grateful

CC. Professor @wahyunahrul.