PancakeSwap Burns $37M Worth of CAKE Tokens

PancakeSwap’s latest burn saw the removal of about 8.9 million CAKE tokens, worth $37M from circulation

PancakeSwap, the popular decentralized exchange (DEX) built on the BNB Chain, announced on Monday the burn of about  8.9 million CAKE tokens, worth $37 million. The latest event adds to the decentralized protocol’s planned series of token burns. 

For context, a token burn refers to a method of erasing a portion of a cryptocurrency from its circulating supply. The burn involves sending an assigned amount of cryptocurrency to a burn address, rendering it inaccessible or unobtainable. The deflationary mechanism aims to reduce the total number of available units while increasing market demand for that asset.

Token burns can be scheduled to occur every week, month, or other specified timeframe. PancakeSwap burns its tokens weekly. Other crypto assets like Ether (ETH) and Binance Coin (BNB) also conduct token burn to improve their performance. 

PancakeSwap Burns 8.9M $CAKE 

The announcement came with a breakdown of the token burn showing that trading fees from crypto swaps and perpetual in PancakeSwap’s V2 saw 188,000 tokens worth $780,000 burnt which is a 5% increase. Predictions and lottery services saw the burn of 46,000 and 30,000 CAKE respectively. 

The DEX also revealed burns of trading fees derived from PancakeSwap’s V3 which were 129,000 CAKE equivalent to $536,000. 

PancakeSwap token burn, which dates back to 2022, is part of the project’s moves to combat inflation and ensure the sustainability of its ecosystem. Last week, the exchange announced it destroyed 9.1 million CAKE tokens worth 37 million. The amount burned from V2 and Perpetual trading fees was 179,000 tokens while V3 saw the burn of 157,000 CAKE tokens. 

PancakeSwap Recent advancement 

The latest burn comes as PancakeSwap made significant advancements in the world of Automated Market Makers (AMMs). The project recently announced the launch of PancakeSwap v4, which aims to address several challenges encountered in previous versions, most notably v3. It also seeks to invite developers to explore and contribute to its development. This latest version is set to operate on both the Ethereum and Binance Smart Chain (BNB Chain)

Amid these developments, the native token of PancakeSwap, CAKE, is not performing so well. At the time of writing, CAKE trades at $4.03, which represents a 5.87% decrease in the last 24 hours.