PancakeSwap, a well-known decentralized exchange, has made headlines with its recent decision to burn over 9 million of its native $CAKE tokens. This significant action has effectively removed approximately $19 million worth of tokens from circulation.
The team at PancakeSwap shared details about this move on a microblogging platform (formerly known as Twitter), explaining that it was part of a strategy to decrease the number of $CAKE tokens available to the public. They highlighted an impressive surge in trading fee revenues across various versions of their platform, particularly noting a staggering 1,000% growth in revenues from position manager and perpetual trading.
A recent tweet from PancakeSwap revealed the specifics of their trading fees and the respective increase in percentage:
- 187,000 $CAKE (worth $397,000) from AMM V2, a 40% increase
- 102,000 $CAKE (valued at $217,000) from AMM V3, up by 56%
- 17,500 $CAKE (equivalent to $37,000) from other sources like Perpetual and Position manager, skyrocketing by 1115%
- Additionally, 46,000 $CAKE (around $98,000) were predicted, marking a 24% increase
In just this month, PancakeSwap reported burning $CAKE tokens valued at over $62 million, with individual burns reaching up to $22 million. This effort represents a substantial reduction in the cryptocurrency’s available supply.
Reducing the circulating supply of digital assets is a common strategy among cryptocurrency enthusiasts. The idea is that if there’s less supply in the market but demand continues to grow, the price should naturally increase, benefiting current token holders.
However, despite these efforts to burn tokens, $CAKE has experienced a downturn. Over the past 30 days, its value has decreased by more than 10%, and it has lost nearly 30% of its value over the past year. Earlier this year, as reported by CryptoGlobe, PancakeSwap distributed a portion of its trading fee revenue, amounting to millions of dollars, to those staking CAKE tokens.
According to DeFiLlama, a popular decentralized finance analytics platform, PancakeSwap currently boasts a market capitalization of $326 million and has $356 million worth of tokens staked. Its annual trading volume stands at a remarkable $174 billion.
