In a recent announcement, Binance Smart Chain (BSC)-based decentralized exchange PancakeSwap burned a staggering 6,991,501 CAKEs, equivalent to $27 million. The news caused a stir in the cryptocurrency market, with investors eagerly anticipating the fallout from the event.
#PancakeSwap Destroy more than $27 million worth of $cake The latest burn event tokens @azcoinnews https://t.co/Lg77PUxJSM
— Kyptos (@azcoinnews) March 14, 2023
Token burn events are routine events in the crypto world where a certain percentage of circulating tokens are burned to reduce the total supply. In the case of PancakeSwap, the token burn is a deflationary measure designed to increase the value of the original token, CAKE, and protect it from inflation.
According to PancakeSwap’s tweet, the token burn includes various revenue streams generated by the platform. Transaction fees on swaps and perpetual contracts contributed the most to burns, with 134,000 CAKE worth $510,000, down 47% from last week. The prediction market contributed 86,000 CAKE worth $329,000, a 3% increase from last week. The lottery contributed 24,000 cakes worth $91,000, down 32% from last week. NFT quotes, profiles, and factories contributed 422 CAKE, worth $2k, down 25% from last week.
The token burn is expected to have a positive impact on the value of CAKE, as it reduces the total supply of tokens, making them more scarce and valuable. PancakeSwap has grown in popularity in recent months, with the exchange gaining traction for its low transaction fees and high liquidity. The exchange has successfully attracted investors from other platforms such as Uniswap, which has resulted in an increase in the value of the native token.
PancakeSwap’s token burn demonstrates their commitment to the long-term development of the platform and the value of their native token. The deflationary measures are expected to help maintain the token’s value and shield it from inflation, making it a more attractive investment option for cryptocurrency traders and investors.
At the time of writing, the CAKE token is currently trading at $3.7, up more than 3%.
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according to Kyptos