Could this latest Uniswap development put CAKE and its investors at risk

  • PancakeSwap observed growth in terms of TVL, but growth may stall.
  • Uniswap’s deployment may affect PancakeSwap’s growth.

A December 17 Update by PancakeSwap [CAKE] revealed that despite the market’s bearish conditions, the DEX had witnessed a spike in its Total Value Locked (TVL). According to DefiLlama’s data, PancakeSwap’s TVL has grown significantly in recent months. At press time, TVL was around $47.2 million.

Read Pancake swap [CAKE] Price prediction for 2023-24

However, PancakeSwap’s dominance and growth may soon come to an end.

This is because Uniswap [UNI] have decided on distribute on BNB. If Uniswap goes through with its plan, it will compete with PancakeSwap among other DEXs. This decision by Uniswap could threaten the former’s market share and growth.

Source: DefiLlama

Competition occurs

If Uniswap dominates PancakeSwap on the BNB chain, it won’t be the first time that DEX will overshadow a network. After Uniswap was distributed on Polygon [MATIC]outperformed other DEXs such as SushiSwap [SUSHI] and Quickswap on the chain in terms of volume, according to data provided by Dune Analytics.

If Uniswap replicates its Polygon network success on the BNB chain, it could put PancakeSwap in a tough spot.

Source: Dune Analytics

Can NFTs Save PancakeSwap?

The way PancakeSwap could retain the interest of its users would be through the NFTs.

Recently, the network tried to capitalize on the hype surrounding the 2022 FIFA World Cup. They incorporated the World Cup events into a game as users could win NFTs if they could accurately predict the outcome of a game.

Despite PancakeSwap’s efforts to generate interest in the NFTs, the volume of the NFT market continued to decline. According to data provided by Dune Analytics, the volume of NFTs on the DEX went from $845,400 in September to $106.00 at the time of writing. This drastic decline in interest could adversely affect CAKE.

Source: Dune Analytics

A look at tokens

As for their tokens, both CAKE and UNI observed a decline in prices and were affected by the bear market. A reason for so could the declining activity of both tokens, which was indicated by their declining velocity.

From data collected by Santiment, it was observed that the speed of both tokens decreased in the last month. A decreasing rate indicated that the rate at which UNI and CAKE moved from one address to another had decreased.

Source: Sentiment

It remains to be seen whether PancakeSwap can continue to grow despite new competition.

At the time of writing, UNI was trading at $5.35 and CAKE was trading at $3.39, according to CoinMarketCap.

Leave a Reply

Your email address will not be published. Required fields are marked *