TL;DR
- PancakeSwap burned 9.17 million CAKE, reducing its supply by $15 million to control its circulation and maintain deflationary pressure.
- The burn included tokens collected from trading fees, prediction markets, lotteries, and NFTs, highlighting a 140% increase in AMM V3.
- This strategy aims to increase the token’s long-term value, benefiting investors by reducing the circulating supply of CAKE.
PancakeSwap, one of the largest decentralized exchange platforms on the Binance Smart Chain (BSC), has carried out a massive burn of CAKE tokens, reducing its supply by 9,171,676 units, equivalent to approximately $15 million.
This measure is part of the protocol’s strategy to control the supply of its native token and maintain deflationary pressure on it, a key aspect of its economic model that aims to increase its value over time.
🔥 9,171,676 $CAKE just burned – that’s $15M!
💰 Trading fees (AMM V2): 177k CAKE ($295k) -9%
💰 Trading fees (AMM V3): 156k CAKE ($260k) +140%
💰 Trading fees (Non-AMM like Perpetual, Position manager etc): 359 CAKE ($0.6k) +27%
🔮 Prediction: 62k CAKE ($104k) -8%
🎟️ Lottery:… pic.twitter.com/lpsbWlRnHX— PancakeSwap is turning 4 #Pancake4ever (@PancakeSwap) September 2, 2024
The CAKE burn included tokens collected through various activities within the platform, such as trading fees, prediction markets, lotteries, and NFT transactions. In total, 177,000 CAKE worth about $295,000 were burned, coming from fees generated by the second version of its Automated Market Maker Mechanism (AMM V2).
PancakeSwap (CAKE) Has Not Yet Recovered from Its Latest Drop
According to the latest data from CoinMarketCap, CAKE is trading at $1.7 per unit. It shows a daily upward variation of 0.4%. However, over the past week, it has lost 11.3% of its value, having previously traded just above $2.
This volume reflected a 9% decrease compared to the previous period, which could be due to changes in trading volumes or user activity. Meanwhile, the third version of the AMM (AMM V3) contributed 156,000 CAKE, valued at approximately $260,000, a 140% increase, highlighting the growing adoption and use of this improved trading system. Other contributions came from non-AMM platforms, such as perpetual contracts and position managers, which added 359 CAKE to the burn, equivalent to about $600, with a 27% increase.
The prediction market, a popular feature where users bet on price movements, also contributed to the process, adding 62,000 CAKE valued at $104,000. However, this segment experienced a slight decrease of 8%, possibly influenced by market fluctuations or changes in user preferences.
Additionally, PancakeSwap lottery, which offers users the chance to win large CAKE prizes. Contributed 28,000 tokens, equivalent to $47,000, showing a 3% decrease. Finally, NFT transactions, although representing the smallest contribution. Were also included in the burn with a reduction of 0.1 CAKE. Valued at $200, showing a 19% decline compared to previous periods.
With these actions. PancakeSwap continues to manage its token supply and promote a market dynamic that favors CAKE scarcity. Which could translate into benefits for holders and investors as the token becomes more limited. And potentially more valuable in the future.
