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CAKE price bottoms out as PancakeSwap announces $25 million burn

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FXStreet in Market News 12 388275
May 6, 2024 20:17

content provided with permission by FXStreet

  • PancakeSwap burned over 8.9 million CAKE tokens early on Monday. 
  • The $25 million token burn likely helped  CAKE price recover from recent losses. 
  • CAKE added nearly 3% to its value on Monday, but then retraced to $2.733, posting mild gains. 

PancakeSwap’s (CAKE) price increased nearly 3% on Monday after the decentralized exchange platform on the Binance Smart Chain (BSC) announced a token burn of more than 8.9 million CAKE tokens, collected from trading fees across Automated Market Makers (AMM) Version 2 and 3 of the platform. 

CAKE token burn likely catalyst for recent gains

PancakeSwap’s native token CAKE’s price rose nearly 3% early on Monday. The DeFi token hit a high of $2.808, up nearly 3% on the day after the announcement, although the token has pared some of these early gains and it retraced to $2.733 at the time of writing. 

The DEX burned 8,924,466 CAKE tokens worth nearly $25 million, per the latest tweet on X. 

PancakeSwap had collected 119,000 CAKE worth $332,000 as trading fees for its AMM Version 2, and 160,000 CAKE worth $448,000 for its AMM Version 3. The DEX is integrated with market makers on Ethereum and Binance Smart Chain to help traders execute their trades at a relatively low cost. The fees collected by the AMMs are then burnt, to reduce the supply of CAKE tokens in circulation. 

PancakeSwap

Proof of token burn 

The DEX recently announced its plans to redirect CAKE emissions from farming pools to bribe locker protocols and boost the liquidity of the DeFi token for users. This move has no impact on CAKE supply since it simply redirects emissions to liquidity pools. 

Find out more about it here.