PancakeSwap, the most widely used DEX in the decentralized finance ecosystem due to its low costs and accessibility, has recently burned another 6,8 million CAKE tokens, worth approximately $32 million.
Token burning is a process that occurs in cryptocurrency projects with the purpose of reducing their supply in the market, by removing the cryptocurrencies from circulation permanently.
This process helps cryptocurrency projects maintain a certain stability by protecting the value of the cryptocurrency or token and encouraging a deflationary mechanism, which can favor its revaluation in the future.
At PancakeSwap, the most widely used decentralized exchange (DEX) in the decentralized finance (DeFi) ecosystem and the most popular on the BSC network, CAKE tokens are burned for the purpose of adding more value to CAKE. PancakeSwap burns CAKE on a weekly basis to keep its supply below its demand.
It may interest you: PancakeSwap is the most visited DEX in the DeFi ecosystem
How do cryptocurrencies burn?
A simple explanation of how cryptocurrency is burned is that it is sent to an address that is not accessible by any person or entity. This means that it is unusable forever.
Token burning is part of PancakeSwap's tokenomics. In the whitepaper of the project, the developers detail what the issuance process and the CAKE issuance rate are like.
In summary, out of 1.152.000 CAKE issued per day, 40 tokens per block, a total of 787.600 CAKE are burned, leaving an effective emission of only 364.400 CAKE tokens/day. Of these, 45.000 CAKE are diverted from token injection to the project lottery but are also burned on the day, leaving the actual effective emission slightly below the amount stated above, the developers explain.
On the other hand, one of the latest governance proposals presented by PancakeSwap, to redesign its tokenomics, seeks to limit the issuance of CAKE to a maximum of 750 million units and reduce its daily issuance rate, in order to reach this limit in approximately 4 years.
PancakeSwap burns another 6,8 million CAKE
On Monday, PancakeSwap completed its regular weekly token burn process. It reported on Twitter that 6.840.003 CAKE tokens were sent to the project’s burn address. PancakeSwap provided the transaction address as proof of completion of the CAKE burn.
Although the amount of tokens burnt CAKE To date, there are more than 480,9 million tokens, and the price of this digital asset on the market is trading at more than 90% below its historical maximum price of $43,9 per unit, seen last April 2021.
According to data from cryptocurrency price monitoring platform CoinMarketCap, the current price of CAKE is $4,34However, the trading volume of this token has increased by more than 150% in the last 24 hours, thanks to the interest of users and investors.
CAKE moved nearly $214 million in trading volume on Monday.
CAKE Price Surges on Recent Binance Labs Investment
The price of CAKE has benefited from a new investment in the project by Binance Labs, the investment arm of Binance. CAKE has risen by more than 6% in the last few hours, following the news of the investment.
According to the company, which has not disclosed the amount of the investment, the funds will be used to boost the development and growth of PancakeSwap. The goal is to finance the project so that it can develop its technology, strengthen its marketing and optimize community support.
As reported by Bit2Me News at the end of April, PancakeSwap is the most used DEX in the DeFi ecosystem, even more than Uniswap, which leads the world of decentralized finance in terms of trading volume. However, by number of visits, PancakeSwap is the leader of this decentralized ecosystem.
While monthly visits to Uniswap average 3,7 million visits per month, on PancakeSwap they exceed XNUMX. 14,4 million views, actually.
Continue reading: PancakeSwap and its proposal to limit the supply of tokens
