- PancakeSwap has deployed its decentralised exchange protocol on Arbitrum.
- The move marks the fourth Ethereum scaling blockchain to play host to PancakeSwap.
- It comes as Ethereum layer 2 chains are attracting increasing attention from DeFi users.
Decentralised exchange PancakeSwap deployed on Arbitrum, an Ethereum layer 2 blockchain, on August 10 as it looks to expand beyond the BNB Chain, the layer 1 blockchain backed by Binance.
PancakeSwap said the move was part of efforts to “connect users and projects wherever they might be” as it sees Ethereum layer 2 networks as a “high-potential area.”
Layer 2 blockchains are built to improve the scalability of layer 1 chains like Ethereum.
Thursday’s Arbitrum deployment marks the fourth time PancakeSwap will launch its DEX on an Ethereum scaling blockchain having already deployed on Linea, zkSync, and Polygon zkEVM networks.
“We’re looking forward to working with projects and users on many chains, as PancakeSwap strongly believes that the future is chain-agnostic for both users and projects,” Chef Mochi, PancakeSwap’s head chef, told DL News.
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The Arbitrum deployment comes amidst the growing popularity of Ethereum layer 2 networks.
These Ethereum scaling blockchains offer fast transactions at lower costs — the same value proposition claimed by alternate layer 1 blockchains like BNB Chain.
BNB Chain, and by extension PancakeSwap, was supposed to be a cheaper alternative to the high fees that frequently plague Ethereum when the former launched in April 2020.
The Binance-backed blockchain originated as a fork of Ethereum and PancakeSwap was itself a copy of Uniswap, the largest DEX protocol on Ethereum.
The apparent success of Ethereum scaling blockchains has begun to cast doubt over the ability of these alternate networks, often called Ethereum-killers by promoters, to compete with Ethereum and its layer 2 chains.
Arbitrum launched its network last year and has already achieved $1.95 billion in total value locked — a DeFi metric for the volume of investor deposits locked in a blockchain.
Arbitrum’s TVL is almost two-thirds of BNB Chain, with the former having dropped from its peak of $21 billion in May 2021 to $3 billion currently, according to DefiLlama data.
Some of these alternate blockchains have even abandoned efforts to exist as independent layer 1 networks in favour of becoming Ethereum layer 2 chains.
Celo is an example of such a pivot. The so-called carbon-negative blockchain developed by CLabs voted to become an Ethereum scaling network in July.
BNB Chain is also impacted by the success of Ethereum layer 2 networks as its community has been considering ways to lower transaction fees on the network to remain competitive.
The blockchain also has a layer 2 network called opBNB, which is currently in its testnet phase.
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about Layer 2 blockchain please contact him at osato@dlnews.com.
