- Pancake Swap’s native token CAKE, witnessed a spike in its social dominance early on Monday.
- The $10.4 million token burn announced by Pancake Swap is expected to act as a bullish catalyst for the DEX’s native token.
- Total value of assets locked in Pancake Swap has been on a consistent decline, alongside the decreasing CAKE price.
Pancake Swap, one of the largest DEXes in the crypto ecosystem, announced the burn of $10.4 million worth of CAKE tokens. While a token burn is typically considered bullish for the asset, in the case of CAKE, reducing its circulating supply is unlikely to catalyze a token's price recovery.
Key on-chain metrics, like total value of assets locked on Pancake Swap and staking of CAKE token, have both decreased considerably throughout the year. CAKE price has nosedived alongside these developments since the beginning of February 2023.
Also read: Arbitrum price declines as institutional investors shed ARB holdings
Pancake Swap awaits bullish catalysts to begin price recovery
Pancake Swap’s native token CAKE suffered a decline last week. Over the past 24 hours, CAKE price declined nearly 3% on Binance. The DEX announced a $10.4 million token burn in a recent tweet:
8,222,066 $CAKE just burned - that’s $11M!
— PancakeSwapEveryone's Favorite D3X (@PancakeSwap) August 21, 2023
Trading fees (V2 and Perpetual): 108k CAKE ($141k) +103%
Trading fees (V3): 37k CAKE ($48k) -7%
Prediction: 66k CAKE ($86k) -19%
️ Lottery: 36k CAKE ($47k) +27%
NFT Market, Profile & Factory: .7k CAKE ($1k) -3%
*%… pic.twitter.com/Wg7jBDwa7j
Token burns typically fuel asset prices, however there are other factors that are likely to contribute to CAKE’s price drop. Based on data from crypto intelligence tracker, DeFiLlama, there is a consistent decline in the total value of assets locked on Pancake Swap throughout 2023.
TVL, Staking on Pancake Swap
The volume of CAKE tokens staked has fallen alongside the total value of assets locked in Pancake Swap.
CAKE’s social dominance climbed on August 21, as seen in the Santiment chart below. The social dominance of the DEX token hit its highest level in 2023. This is an on-chain metric that reveals the relevance of the token among crypto holders.
 [18.39.02, 21 Aug, 2023]-638282222193255612.png)
Pancake Swap Social dominance vs price
It remains to be seen whether the token burn and the rising social dominance can fuel a recovery in CAKE price.
Bitcoin, altcoins, stablecoins FAQs
What is Bitcoin?
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
What are altcoins?
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
What are stablecoins?
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
What is Bitcoin Dominance?
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
US Senate likely to vote on the stablecoin GENIUS Act by Memorial Day as Brazil considers stringent regulations
US Senators Kirsten Gillibrand and Cynthia Lummis are optimistic that the Senate will vote on the revised stablecoin bill by Memorial Day. The revised stablecoin bill has refined key elements, including ethics, consumer and bankruptcy protection.
Bitcoin retreats further as chances of major breakthrough in Russia-Ukraine peace talks weaken
Bitcoin price edges below $102,000 on Thursday after repeated rejections at the $105,000 resistance over the past five days. Neither US President Donald Trump nor Russian President Vladimir Putin are expected to attend the Ukraine-Russia peace talks in Turkey.
Top 3 Gainers Amp, Aethir, Helium: AMP, ATH lead market gains as broader crypto market cools
The cryptocurrency market is taking a breather on Thursday after sustaining gains for almost two weeks, buoyed by heightened risk-on sentiment amid easing trade tensions between the United States (US) and China.
XRP price risks slashing weekly gains as liquidations surge amid falling network growth
XRP price peaked at $2.65 on Wednesday, stalling the uptrend amidst a market-wide slowdown. Long liquidations reach $8.44 million over the past 24 hours as the uptrend targeting $3.00 falters.
Bitcoin: BTC bulls aim for $105,000 after nearly 10% weekly gains
Bitcoin price stabilizes around $103,000 on Friday after rallying nearly 10% this week. Risk-on sentiment prevails as Trump announced a trade deal with the UK and ahead of the meeting with China this weekend.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.