PancakeSwap forks Uniswap V3: Are copycats like OHM Forks making a comeback?

  • PancakeSwap, a popular DEX, upgraded to its Version 3 on BNB and Ethereum chains through a fork of Uniswap V3.
  • Blockchain developers raise concerns of increased vulnerability to attacks, reminiscent of OHM forks. 
  • UNI is currently rallying, it remains to be seen whether the gains are sustainable in the long-term. 

Decentralized exchanges have long practiced “forking” of protocols for easy access and “copy-paste” code to power DEXes in the short-term. PancakeSwap’s Version 3 launch on the BNB and Ethereum chain was powered by a fork of Uniswap V3. 

The move garnered criticism from blockchain developers in the community and raised the issue of “security” of DEXs, since duplication exposes multiple platforms to the same threat. 

Also read: Ethereum Improvement Proposal EIP-4844 turns experts bullish, will ETH price rally?

PancakeSwap forked Uniswap V3 for Version 3 launch on BNB and Ethereum chain

PancakeSwap, one of the most popular DEXs in the DeFi ecosystem forked Uniswap’s V3 for its Version 3 launch. PancakeSwap V3 was rolled out on BNB and Ethereum chain, and gained $128.86 million in Total Value Locked (TVL) since its launch. 

PancakeSwap V3 TVL

PancakeSwap V3 TVL

PancakeSwap’s forking of the largest DeFi DEX Uniswap reminds experts of the DeFi summer of 2022 and OHM forks, which ended up in rug pulls for several market participants. 

There is a good and bad side of PancakeSwap forking UNI’s DEX. Uniswap has over 26,600 daily active users as of January 2023. The number of active users and the DEXs’ functionality could bring benefits to CAKE’s ecosystem. 

However, the dark side of “copy-paste” DEXs was the OHM forks of 2022. A copy-paste of the code without essential due diligence could result in security threats and loopholes that malicious actors could exploit. 

What were the OHM forks of the past

OHM forks are considered catalysts of DeFi 2.0 and the inspiration for metaverse projects. In 2021-22, forks of Olympus DAO’s codebase were used to obtain the liquidity of the protocol, instead of relying on DeFi’s practice of “yield farming.” 

Yield farming is the practice of locking up tokens for a fixed period of time and earning a yield through staking. Olympus DAO’s success made it the focal point of several forked projects that sprung up through the summer. 

Some of the most popular OHM forks of the time were Wonderland (TIME), Klima DAO (KLIMA), Rome DAO (ROME), Snowbank (SB), Hector DAO (HEC), Spartacus (SPA), Invictus (IN) and TaiChi DAO (TAC). 

Wonderland (TIME), a fork of OHM’s contract, was launched in the Avalanche ecosystem. The project’s contract was sniped at launch, raising questions on whether anything was “inherently wrong” with Wonderland. A group of insiders/ DeFi friends funded the launch and sniped the contract after being part of the core group of TIME. 

Several users were rug pulled (lost their funds) in a similar manner, when they picked projects based on lucrative Annual Percentage Yields (APY). 

OHM forks

OHM forks that suffered rug pull 

Prior to OHM forks, 2020 was filled with the launch of DeFi food-themed protocols like SushiSwap, BurgerSwap, Yam Finance, Bakery Swap, among others. Influencers and analysts warned crypto traders farming for yields on the BNB chain as Bakery Swap resulted in losses for several retail market participants. 

Binance CEO CZ commented on the trend in DeFi in a recent tweet, addressing Uniswap’s fork by PancakeSwap’s team.

Is PancakeSwap’s V3 launch the start of a new trend?

DeFi’s food-themed projects in 2020, OHM forks of 2021-22 and now Uniswap V3 forks is likely the new trend in Decentralized Finance. CAKE price witnessed a correction and started its recovery soon after. The launch of PancakeSwap V3 turned out to be a “non-event” for CAKE holders, unlike the V2 launch, which was a “sell-the-news.”

Uniswap’s UNI token continued rallying, yielding nearly 5% gains for holders since April 5, as the protocol got forked by PancakeSwap. It remains to be seen how sustainable UNI’s gains are in the long-term.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Recommended content

Recommended Content

Editors’ Picks

MANTA suffers 4% pullback after unlocking tokens worth $40 million

MANTA suffers 4% pullback after unlocking tokens worth $40 million

Manta Network (MANTA) unlocked over 8% of its circulating supply on Thursday. The unlocked tokens were airdropped and distributed in public sale, according to data from Tokenunlocks. 

More Cryptocurrencies News

XRP struggles to recover as lingering Ripple lawsuit could reach Supreme Court, former SEC litigator says

XRP struggles to recover as lingering Ripple lawsuit could reach Supreme Court, former SEC litigator says

The SEC vs. Ripple potential showdown at the Supreme Court is likely, says former SEC litigator Ladan Stewart. XRP Ledger calls developers, businesses and investors to build on the blockchain, extending Apex 2024 registration until April 30. 

More Ripple News

Bitcoin Layer 2 Merlin chain TVL climbs 20%, defying broad market correction

Bitcoin Layer 2 Merlin chain TVL climbs 20%, defying broad market correction

Merlin chain’s TVL added 20% this week, and crossed $800 million on Thursday. Bitcoin Layer 2 assets noted double-digit losses in the past week. Stacks, Elastos, SatoshiVM, BVM are hit by a correction as Bitcoin hovers around $61,000. 

More Bitcoin News

If Bitcoin restarts bull run, these altcoins are likely to explode Premium

If Bitcoin restarts bull run, these altcoins are likely to explode

If Bitcoin’s consolidation ends and the bull run resumes, altcoins are likely going to trigger a massive rally. Last cycle’s hot tokens like SOL, AVAX, WIF, ONDO, etc., could see renewed enthusiasm. 

More Cryptocurrencies News

Bitcoin: BTC’s rangebound movement leaves traders confused

Bitcoin: BTC’s rangebound movement leaves traders confused

Bitcoin (BTC) price has been hovering around the $70,000 psychological level for a few weeks, resulting in a rangebound movement. This development could lead to a massive liquidation on either side before a directional move is established. 

Read full analysis