PancakeSwap Approves “Big Burn” For CAKE, Why It Could Be Massively Bullish
Centralized and decentralized exchanges are stepping up their game, with the upcoming launch of Uniswap v3, competition in the sector is bound to be fierce. PancakeSwap’s second iteration is also around the corner. CAKE holders will be able to profit.
In a recent vote, PancakeSwap’s community decided to approve a feature called the “Big Burn”. Therefore, after April 23rd “Great Migration” the exchange will buy back and burn more CAKE “than ever before”. Every trade in PancakeSwap v2 will “contribute” to this mechanism.
The exchange’s daily trading volume sits at around $4 billion. According to the recently approved burn mechanism, this figure will be multiple by 0.05%. As a result, around 2.2 million CAKE could be buyback and burned each day. If PancakeSwap maintains its current daily trading volume, its native token buying pressure could skyrocket for the benefit of investors.
Analyst Vivian Medithi published an article on Nasdaq making some bullish predictions on CAKE. At that time, CAKE was trading at $21.26 following a 1,200% year-to-date rally in February. The analyst highlighted the bearish sentiment of some investors and the token’s capacity to prove them wrong.
Medithi quotes Coinpedia, Wallet Investor, and Digital liquidity providers and keeps PancakeSwap’s fee below the “tradition 0.3%” used by their competitors, according to an official post. The migration will also add the following:
(…) we’re creating a new set of LP Tokens, and our farms and exchange will start supporting the new type instead of the old ones.
Investors with tokens on this exchange should be aware that they will stop receiving rewards for the “old type of LP Tokens. Instead, the rewards will shift to the new ones. Users must take their tokens out of all PancakeSwap’s products and add liquidity with the new token to re-stake in new farms to maintain their rewards. The team behind the exchange added:
We’ll also make a new set of farms with the same rewards and token pairs as the old ones. The old farms will stop giving out rewards, so you’ll need to transfer to the new ones to keep farming yield.
CAKE is trading at $26,85 with a 2.9% loss in the daily chart. In the weekly and monthly chart, CAKE has 17.1% and 144.9% profits, respectively.