The Binance Smart Chain project burned CAKE worth around $72.3 million this week.
PancakeSwap’s native token has seen a surge after the exchange completed its weekly token burn, reducing the supply of tokens by 5.3 million.
PancakeSwap schedules token burns per week as part of its deflationary mechanics. The exchange estimates that approximately 530,000 new tokens are distributed every day through liquidity farming and staking pools. But in order to stop the supply outstripping its demand, the DeFi protocol ensures that a proportion of its’ tokens end up as burned CAKE on a regular basis, with a Pancake Swap token burn happening every Monday.
CAKE reached highs of $47.68 per token back in April 2021 when the exchange was at the peak of its popularity. At the time, Binance Smart Chain usage surged as traders and yield farmers began to look for alternative networks beyond Ethereum. With other DeFi projects now beginning to rise in value, CAKE holders will be hoping that the token can continue its upward trend, and one of the things that really makes Pancake such an interesting project is that every week sees more and more burned cake, thus reducing supply (and as a result increasing demand).
Unlike other popular and centralized cryptocurrency exchanges like Binance and Coinbase that are operated by a single corporate entity, decentralized exchanges (DEXs) allow trading without an intermediary. Many such DEXs are based on Ethereum, where the bulk of the decentralized finance (DeFi) action takes place.
What is PanCAKE swap and why does Burned Cake matter?
PanCAKE swap is a decentralized exchange that allows you to trade cryptocurrencies and tokens without a centralized intermediary. While keeping the custody of its token, it is built on automated smart contracts deployed on Binance Smart Chain.
Binance Platform is a centralized exchange service, and it does not control or operate PanCAKE swap, nor has it anything to do with the regularly burned CAKE. It was built by anonymous developers. The service looks and feels very similar to the popular Ethereum DEX, Uniswap. PanCAKE swap is used specifically for BEP-20 tokens running on Binance Smart Chain, although it’s possible to bring over tokens from other platforms via Binance Bridge and “wrap” them as a BEP-20 token for use on the DEX.