PancakeSwap Burns 498K CAKE This Week. Will Price Follow?

PancakeSwap, the leading decentralized exchange on the layer-1 BNB Chain, has completed its weekly token burn. This time, it wiped out 498,000 CAKE, worth $1.02 million. This brings its current circulating supply to 335.41 million, representing 74.53% of the total supply of 450 million tokens.

PancakeSwap Completes Weekly Burn

PancakeSwap explained that the token burn occurred across various products. They include AMM v2, where 167,000 CAKE tokens (worth $344,000), and AMM v3, where 208,000 CAKE (worth $428,000) were burned.

It also covers AMM Infinity, where 36,700 CAKE ($76,000) got burnt. Other products from which tokens were burnt included its prediction and perpetual trading services. Under these, 86,000 CAKE tokens, worth $177,000, were burnt.

Crypto projects implement token burns as a deflationary mechanism to reduce a cryptocurrency’s supply. The goal is to create scarcity for the crypto, potentially boosting its price in the long term. It also aims to boost investor confidence as they believe the project’s creators are committed to the long-term development and growth of the protocol.

Various crypto projects implement periodic token burns. For instance, the development team behind the BNB Chain executes crypto burns every quarter. Projects such as Aster, Hyperliquid, Shiba Inu, and Uniswap also implemented periodic burns to bolster the performance of their native cryptocurrencies.

PancakeSwap recorded a net CAKE mint of -345,000 tokens. The negative net mint implies that more CAKE tokens were burned than minted throughout the week.

Will CAKE Pump?

Granted, the periodic CAKE burn is partly aimed at bolstering the token’s price. While some projects in the past have seen notable price surges after a token burn, CAKE has yet to experience a significant price pump.

According to on-chain data from CoinMarketCap, the crypto sold for $2.07, representing a mild 1% increase in the past 24 hours. However, the token remains a far cry from its all-time high of $44.18 recorded in April 2021.

On the bright side, CAKE’s 24-hour trading volume rose by over 10% today, to $46.3 million.

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