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Binance Smart Chain (BSC) based decentralized exchange platform PancakeSwap reported a new development in the price of its CAKE token. Following the announcement that over 8.9 million CAKE tokens collected from transaction fees in Automated Market Makers (AMM) Versions 2 and 3 were burned, the price increased by approximately 3%. This development had a significant impact on the CAKE token, accelerating recent gains.
Development Boosting CAKE Price
The native token of PancakeSwap, CAKE, saw an approximate 3% increase early yesterday. The DeFi token reached up to $2.808 after the announcement, but later retraced to $2.64 at the time of writing. Despite these fluctuations, the platform’s strong fundamentals and the supportive nature of its community are evident, typical of the crypto market‘s volatile nature.
PancakeSwap’s recent action shows that the DEX is following a reliable roadmap for the future. According to a recent tweet, the DEX burned approximately $25 million worth of 8,924,466 CAKE tokens. This burn highlights the successful fee collection process of AMM Versions 2 and 3.
Enabling Transactions at Lower Costs
PancakeSwap collected $332,000 worth of 119,000 CAKE for AMM Version 2 and $448,000 worth of 160,000 CAKE for AMM Version 3. This strategic move aims to increase transaction volume and reduce costs for its users. Integrated with Ethereum and Binance Smart Chain market makers, PancakeSwap offers its users the opportunity to transact at lower costs, gaining a competitive advantage.
The fees collected by AMMs are later burned to reduce the circulating supply of CAKE tokens, thereby enhancing their value. This burning contributes to a reduction in the supply of CAKE tokens and thus an increase in their price. Thus, PancakeSwap’s business model and continually evolving ecosystem strengthen its position as a significant player in the crypto world.
At this stage, the burning process carried out by PancakeSwap on the CAKE token is significant for the long-term sustainability of its platform. It also represents an important step in supporting the goal of increasing the token’s value. Such developments can be considered a strong indicator of PancakeSwap’s future success.
