PancakeSwap CAKE Tokens Skyrocket by over 50%

PancakeSwap CAKE Tokens Skyrocket by over 50%

CAKE, the token issued by PancakeSwap has recently seen an impressive 54% increase in just seven days. This is a notable event in blockchain and decentralized financial (DeFi). The fact that PancakeSwap is gaining prominence in the industry of decentralized finance can be seen by the fact the token market value reached $900 million with a fully-diluted valuation at $1.3 billion.

Burning Tokens in a Strategic Way

PancakeSwap's strategic decision to burn tokens on December 26 led to the destruction of over 10 million CAKE tokens worth around $34million. CAKE's price increased significantly as a result. This action led to a 40% reduction in supply. This increased the scarcity of the tokens and made it more attractive. The token burning not only made investors feel good, but also contributed to the platform becoming a more popular decentralized exchange.

Accumulation and Performance of the Market

CAKE managed to maintain a strong performance in spite of the consolidation on the market. The price of the token continued to rise and reached $3.37. This was higher than its previous value of $2.1. This price action was a departure from a falling wedge pattern. The burn caused a decrease in the number of CAKE tokens in circulation. This brought the total tokens from 275 to 265 and increased the price by 18%. The 24-hour trading volume for CAKE also increased by 37%, reaching a total $284 million. This is a rise of over 50% in just one month.

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Proposal of a recent Supply Cap

A new suggestion made by the PancakeSwap Community on December 21, contributed to CAKE's popularity spike. Once this idea was developed, it was suggested that the entire CAKE supply be reduced from 750 to 450 millions. The modification was done for several reasons. These include the fact that CAKE had been consistently deflationary in the past few months, aspirations to achieve ultrasonic CAKE and the need to get away from hyperinflationary tokenomics. The market accepted the revisions much more than before, as evidenced by the 21% increase in CAKE's price after the proposal.

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