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PancakeSwap has seen the price of its native token rise slightly after the multi-chain decentralized exchange announced it had burned more than 9 million of the tokens.
The price of PancakeSwap (CAKE) rose by about 2.3% following the announcement. This saw buyers recover from lows of $1.64 earlier in the day. CAKE changed hands around $1.72 at the time of writing, with the 24-hour trading volume spiking more than 37% to $21.3 million.
PancakeSwap’s token burn
On Sept. 2, PancakeSwap (CAKE) posted on X that the latest token burn saw it permanently remove 9,171,676 CAKE tokens from circulation. According to details published by the DEX platform, the burn accounted for CAKE worth $15 million.
🔥 9,171,676 $CAKE just burned – that’s $15M!
— PancakeSwap is turning 4 #Pancake4ever (@PancakeSwap) September 2, 2024
💰 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
It’s the latest token burn for PancakeSwap, reducing the circulating supply of CAKE to 264,190,448 tokens. This supply accounts for 58.71% of the total supply, which the community has sought to reduce with regular token burns.
Across the crypto market, projects have employed burning mechanisms to reduce the native token’s circulating supply. The overall goal is to inject scarcity into the given digital asset’s market, which is seen as having a bullish impact on price.
PancakeSwap introduced a pivotal proposal on CAKE tokenomics in December 2023. The proposal asked the community to vote on whether to cut the CAKE supply by 300 million tokens, reducing it from a maximum of 750 million tokens to 450 million tokens.
The vote passed, and PancakeSwap currently has a total supply of 383,118,820 CAKE, with a maximum supply of 450 million tokens.