CAKE, the native token of the decentralized exchange PancakeSwap, has spiked 15% since the project opted to burn $72 million worth of its tokens on Monday.
It's good news for the embattled decentralized finance (DeFi) project and its token, which is trading 67% lower from its all-time high of $47.68 witnessed April 30. The crypto is changing hands for around $15.58, according to Binance data.
Today's jump in value represents the highest single daily gain for the exchange's token since June 23.
PancakeSwap also said it had bought back $1.7 million worth of CAKE from the market, inclusive of trading and prediction fees.
Token burns are not uncommon in crypto and typically function by removing a given asset from the circulating supply, thus reducing the overall supply and, at times, temporarily boosting the asset's price.
Additionally, PancakeSwap's developers can mint new tokens and add them to the supply.
The exchange allows users to trade crypto sans centralized intermediary while also keeping custody of a user's tokens, and is based on the Binance Smart Chain (BSC).
On April 23, PancakeSwap helped push the total number of transactions on BSC to five times that of Ethereum's where the exchange contributed more than 20% of BSC’s transactions on the day.
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