- PancakeSwap price increases after $72.3 million of CAKE burn
- 530K new tokens are distributed daily through staking pools and liquidity farming.
PancakeSwap’s CAKE token price surged after the exchange ends its weekly token burn, however, reducing the token supply by 5.3 million. Moreover, it jumped 11% prior to cooling off early Tuesday.
CAKE Price Surges Following Token Burn
The Binance Smart Chain token CAKE price spiked 11% following a burn event Monday. More so, it burns 5.3 million CAKE tokens, PancakeSwap also purchased back $1.7 million worth of tokens from the market.
🔥 5,300,000 $CAKE burn equivalent to $72.3M USD!
💰 We bought back $1.7M USD of CAKE from the market (trading fees + Prediction fees)
🥞 $80k USD of CAKE came from NFT & Profiles
🥞 $140k USD of CAKE came from auto-compound fees
(\ 🥞 /)
(つ°ヮ°)つ 🎰 pic.twitter.com/eIhutXDmwp
— PancakeSwap 🥞 #BSC (@PancakeSwap) July 5, 2021
In addition, as part of its deflationary procedure, the PancakeSwap schedules token burns weekly. Even more, the exchange evaluates that nearly 530,000 new tokens are distributed daily through staking pools and liquidity farming. In order to stop the supply from outperforming the demand, the exchange burns a little amount of token when users trade or harvest yield on its platform. Notably, PancakeSwap will organize the token burn manually every Monday.
Read Also: PancakeSwap (CAKE) Technical Analysis 2021.
Crypto projects often burn tokens to decrease the circulating supply. Added to this, Binance burns BNB tokens quarterly, which has helped the coin spike in the past.
According to CoinMarketCap, the CAKE price is at $15.8, at the time of writing.
CAKE hit an all-time high price of $47 in April when the exchange is more popular. During that time, the Binance Smart Chain usage increased as traders searched for alternative networks beyond Ethereum (ETH).
With other DeFi projects now starting to rise in value, CAKE holders will be hoping that the token can continue its upward trend in the near future. Furthermore, CAKE could reach new ATH soon.