This action is a deflationary strategy to cut supply and possibly boost remaining token values.
The burned CAKE tokens came from multiple sources, showcasing the platform’s varied value generation.
Diverse Sources Fuel CAKE Token Burn
A closer look at the breakdown reveals interesting shifts in trading activity and other contributions to the burn.
From Automated Market Maker (AMM) Version 2, 122,000 CAKE tokens, valued at around $541,000, were burned. Indicating a 35% decrease from the previous week. In contrast, AMM V3 saw a 53% increase in trading fees contributing to the burn, with 197,000 CAKE ($874,000) being incinerated. Non-AMM sources like Perpetual, Position Manager, and others also saw an uptick, contributing 1,200 CAKE ($5,000), a 63% increase, showcasing a diversification in the platform’s revenue streams.
🔥 9,003,400 $CAKE just burned – that’s $40M!
💰 Trading fees (AMM V2): 122k CAKE ($541k) -35%
💰 Trading fees (AMM V3): 197k CAKE ($874k) +53%
💰 Trading fees (Non-AMM like Perpetual, Position manager etc): 1.2k CAKE ($5k) +63%
🔮 Prediction: 45k CAKE ($201k) -1%
🎟️ Lottery:… pic.twitter.com/EzO5NSd0d0— PancakeSwap v4🥞 (@PancakeSwap) March 25, 2024
Other areas contributing to the burn included Prediction and Lottery services, which saw decreases of 1% and 25% respectively, with Prediction burning 45,000 CAKE ($201,000) and Lottery 22,000 CAKE ($100,000). NFT transactions and Games also contributed, albeit to a lesser extent, reflecting a decrease in their contribution to the burn.
This latest burn event underscores the platform’s ongoing efforts to manage its token supply actively. By burning a portion of the tokens collected from trading fees and other services, the platform aims to create a more balanced token economy, potentially leading to increased token scarcity and value over time.
Such mechanisms are integral to the DeFi ecosystem, offering innovative approaches to value creation and distribution.
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