PancakeSwap could easily be one of the best projects to watch this week. This follows the moves it has taken in the last 48-hours that have positively impacted its supply and demand dynamics.
Yesterday, the project announced that it was burning 5.3 million tokens. Besides this burn, Pancakeswap also announced that it was buying back $1.7 million of CAKE. These moves instantly impacted the price, as it jumped by 11% within the announcement. It is also showing some positive price action today, despite the broader market being sluggish overall.
The project has been burning tokens weekly as part of its deflationary tokenomics. This approach has seen it rally recently, hitting a high of $47.68. However, it is not just its deflationary nature that makes it valuable. PancakeSwap has been instrumental to the Binance Smart Chain and has come out as a firm competitor to Uniswap in terms of access to DeFi projects.
Its usage is so high that from its data, 530k new tokens are distributed daily. This is usually done through staking pools and liquidity farming. To ensure that supply and demand are always at equilibrium, Pancakeswap burns minute amounts of tokens anytime investors use the platform.
Deflationary projects have come out as some of the best in the crypto space. Their ever-shrinking supply means that the price is likely to keep going up in the long run. Besides CAKE, Binance Coin (BNB) is another deflationary project, and it has performed very well since it was launched.