PancakeSwap (CAKE) turns bullish as $28 million worth of it just burned
PancakeSwap announced the results of the latest round of burning CAKE, the decentralized exchange’s native token. According to the data presented, 6.95 million tokens were burned, which at the current price has an equivalent value of $28 million.
If CoinMarketCap data is to be believed, the CAKE burned is 4.4% of the circulating token supply. Moreover, the total supply of CAKE is more than half of the token’s max supply, which also signals extensive token burning. Given that, until recently, PancakeSwap’s token offer was unlimited, such tokenomics is impressive.
Against the backdrop of the news, CAKE price continued the rally that began when the DeFi sector was revived by the collapse of centralized exchange FTX. The price of cake has increased by more than 12% in the last two weeks.
Cake paradox
Listed at $4 per token, CAKE has a market capitalization of $640 million. If the entire token offering is considered, it would have a capitalization of $1.4 billion.
At the same time, PancakeSwap’s total value locked (TVL) is already $2.85 billion, not including another billion locked in stake. In other words, the exchange currently owns four to five times more blockchain than its current market valuation. Plus, the cake itself plays an important role at PancakeSwap and is a kind of fuel for all those billions of businesses.
