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Multi-chain decentralized exchange PancakeSwap has revealed another major token burn. On Monday, the team shared that the latest burn for the DEX platform’s native token CAKE saw 8.5 million tokens permanently removed from circulation.
The burn, which is part of the overall economic roadmap for PancakeSwap, follows the recent reduction of maximum CAKE supply from 750 million to 450 million. The community’s vote on the 300 million CAKE supply reduction happened in late December last year.
A few days prior to the vote, PancakeSwap burned 10 million tokens.This latest burn was for CAKE tokens worth over $25 million.
Burned tokens were from trading fees on the AMM V2, AMM V3 and non-AMM including perpetual and position manager. Burned CAKE was also from prediction, lottery, NFT and games.
🔥 8,506,585 $CAKE just burned – that’s $25M!
— PancakeSwap🥞Everyone's Favorite DEX (@PancakeSwap) January 15, 2024
💰 Trading fees (AMM V2): 107k CAKE ($319k) -14%
💰 Trading fees (AMM V3): 103k CAKE ($308k) +10%
💰 Trading fees (Non-AMM like Perpetual, Position manager etc): 0.7k CAKE ($2k) -92%
🔮 Prediction: 38k CAKE ($114k) +12%
🎟️ Lottery:… pic.twitter.com/AA22FvaTtq
What next for CAKE price?
As the team highlighted amid the proposal to cut maximum supply to 450 million, the long term impact could be on the project’s stability and adoption across the decentralised finance (DeFi) ecosystem.
But PancakeSwap’s significant token burns have often coincided with notable price movements for the native token. Burn mechanisms across the crypto landscape are part of the tokenomics that market experts say could result in long term value appreciation for a token.
As shown through the recent vote, the PancakeSwap community is supportive of these regular CAKE burns. They are also behind other initiatives aimed at putting the project ahead of competing platforms. As such, this latest move could buoy sentiment amid the broader market’s bullish expectations.
Currently, CAKE price is poised near $2.95, roughly 1.2% up in the past 24 hours. However, its down over the past two weeks after paring gains that saw it reach highs of $3.94 in late December. That upside coincided with the token burn and supply reduction.
If sentiment improves following broader market declines in the past few days, CAKE could attempt to reclaim control near the recent peak. The flipside could see buyers attempt to defend the $2.00-$2.50 region.
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