According to data from Messari, Polygon (MATIC) has reversed the rise of PancakeSwap (CAKE)
Data from the market data analysis tool Messari shows that Uniswap is winning the battle of decentralized exchanges (DEX) against PancakeSwap.
Earlier this year, PancakeSwap briefly became the number one DEX by volume. But thanks to Polygon and its lower gas fee structure compared to Ethereum's layer 1, Uniswap has risen to the challenge.
PancakeSwap unable to sustain its rise
The popularity of DEXs has continued to rise this year, reaching a volume of $ 405 billion in the second quarter of 2021. A year ago, the volume of DEX for the second quarter of 2020 was only $ 3.4 billion, marking a staggering 11,751% increase in one year.
Much of the volume of the second quarter of this year came in May, the height of the local peak in the markets. Given that prices and interest in cryptocurrencies have declined substantially since then, it would be surprising if this trend continues into the third quarter.
Regardless, a monthly breakdown by DEX volume shows a significant drop in volume for PancakeSwap in June. Uniswap ends the second quarter of 2021 on top with the highest market share.
“While for a brief moment in April, the breakfast-themed DEX invested Uniswap in volumes, its market share has since plummeted due to the rise of Uniswap V3 and the demise of the Binance Smart Chain ecosystem after the collapse of May".
PancakeSwap launched on Binance Smart Chain (BSC) in September 2020. It was hailed as the answer for those who want to do DeFi without paying exorbitant gas fees for the privilege.
This selling point allowed it to rise quickly, despite criticism that the BSC authority testnet was too centralized or that the source code for PancakeSwap was copied from uniswap.
But the rise of Polygon has seen an erosion in BSC's share of DEX volume.
The Polygon (MATIC) is the key
At one point, Polygon was a minor player operating in the Ethereum ecosystem. However, Ethereum's core developers turned to it as a solution to lose ground to BSC.
After a rebrand from Matic and a renewed vision of its place in the Ethereum ecosystem, Polygon quickly established itself as a major player offering Layer 2 scaling through its multi-chain approach.
“Polygon is a protocol and framework for building and connecting Ethereum-compatible blockchain networks. Adding scalable solutions on Ethereum that support a multi-chain Ethereum ecosystem ”.
Polygon's technology has transformed Ethereum into a multi-chain system, which they call the Internet of Blockchains. This is similar to how rival networks like Polkadot, Cosmos, and Avalanche operate. But with the added advantage of Ethereum's network effect.
Polygon co-founder Jaynti Kanani said that what sets them apart from other Layers 2 is the ability for developers to choose which scaling solution best suits their needs.
“What sets Polygon apart from other L2 solutions is our Layer 2 aggregation approach, which allows developers to choose the scaling solution that best meets their needs, be it ZK, OPR, data availability chain or other. scaling approaches like our PoS chain of engagement ”.
Since the rebrand, more than 450 projects have partnered with Polygon, and transactions per day now exceed those of Ethereum.
