CAKE/USD Technical Analysis
About PancakeSwap (CAKE)
CAKE is PancakeSwap’s native token. It was launched on the Binance Smart Chain BEP-2 in September 2020. It was designed to serve a variety of purposes within its growing ecosystem. It incentivizes liquidity within the network and can also be used as a governance token, whereby CAKE holders can vote on proposals for the benefit of the platform. Staking tokens in syrup pools can also reap promising rewards.
There is no maximum supply for CAKE, which means it is a deflationary token. CAKE tokens are burned on a regular basis, in order to reduce the supply. As more CAKE tokens are burned, the supply lessens. As the supply decreases, the price of PancakeSwap rises, and this becomes visible on CAKE’s chart too. Since PancakeSwap is a community-based project, the team is planning to shift to a community-led emissions model, which means that CAKE holders will help decide by voting on how emissions are to be adjusted for the followingt month. Voting power is positively correlated to the number of CAKE tokens a user has.
CAKE has a market cap of $4.3 billion, which makes it the 43rd-largest crypto in the world, as of early November 2021. As more users get into the crypto world, they are likely to need a DEX to invest in smaller tokens. This will certainly lead to more people using PancakeSwap, due to its flexibility and its transaction rate of mere seconds. This is why the future is promising for CAKE.
As the world began to recognize DeFi protocols and exchanges, innovative and mobile platforms began offering services, turning their backs on the traditional single point of authority model. One of these platforms is PancakeSwap, which is emerging as the most secure decentralized finance (DeFi) project on the Binance Smart Chain.
PancakeSwap was launched just a year ago, but it quickly climbed up the ladder and became the most prominent automated crypto market maker or AMM that provides trading liquidity on the Binance Smart Chain. It has already established itself as the leading project in the Binance Smart Chain. Being the "crown jewel" of BSC as per a report, PancakeSwap (CAKE) has sole ownership of almost a third of the $23 billion total value locked (TVL) in the BSC Network. The current TVL is around the $7 billion mark, far ahead of succeeding protocols Venus and MDEX, which have $2.55B and $1.37B, respectively. It also claims to be the most-used dApp across other ecosystems, housing over 5 million wallets and $1 trillion in volume.
Having a solid foundation on the DeFi landscapes in terms of yield farming, staking, and NFTs, the protocol innovates its own Lottery by Chainlink VRF and its own game project via the Team Battle feature. Focusing on its CAKE token, its development team accelerates the deflation of the CAKE token, having burned $80.5 million CAKE tokens already.
PancakeSwap CAKE has ventured deeper into the NFT world by launching its own NFT marketplace and its own NFT collection, PancakeSquad. The PancakeSquad Collection is composed of 10,000 NFT images that can be minted using the CAKE token. PancakeSwap's latest ongoing plan includes monthly CAKE emission reduction, regular NFT drops, regular IFOs, Pools+Farms and Farm Auctions.
In September 2020, a group of unnamed developers established PancakeSwap. Built on the Binance Smart Chain, PancakeSwap caters to quick transactions that are cheaper than Ethereum. When PancakeSwap was launched, the DeFi mainstream moment in 2020 experienced massive demand for transactions, causing Ethereum to record slow, expensive transactions. Almost all DeFi apps were somewhat congested on the Ethereum Network by that time.
Aside from more affordable network fees powered by Binance Smart Chain, PancakeSwap also offers cheaper swap fees of 0.2%, while the standard fee is 0.3%. Due to cost-effective fees, PancakeSwap has rapidly grown in trading volume and total value locked (TVL). By February 2021, it had become one of the industry's biggest decentralized exchanges(DEX), competing with AMM pioneer and Ethereum's favorite, Uniswap.
Unlike Uniswap and SushiSwap, PancakeSwap is straightforward to use; users can provide liquidity to the network and in return, they are rewarded. This fourth-generation blockchain was devised to run parallel to BSC, featuring an ultra-high performance, capable of producing blocks every 3 seconds.
CAKE Price Factors
CAKE became popular among investors on social media, when it was first launched in September 2020. Almost all cryptocurrencies rise and fall in a rollercoaster ride, due to the market volatility that continues to plague the crypto world. When you analyze CAKE’s chart during the recent crypto crash, many tokens, including CAKE, were hit. There were many tokens that reached new ATHs and ATLs, which confused many traders, particularly those who were new to the game, and a lot of people lost some money, due to panic-selling.
Although many platforms are launching their projects, there is still a certain place for PancakeSwap to thrive within the crypto ecosystem, and this is influencing CAKE’s rate.
CAKE is deflationary, which simply means that its developers will continue to burn tokens, in order to lessen the supply, thus pushing the price of CAKE higher. Since it is a deflationary token, the value of CAKE has the potential to rise over time.
The DeFi space is growing significantly, which means that services like those offered by PancakeSwap will be vital to the ecosystem in the coming years. PancakeSwap is a big project with great potential, as its acceptance is reaching out across the globe, with more crypto exchanges starting to offer CAKE through their platform.
Furthermore, as PancakeSwap currently offers far lower fees than other DEXs, it offers an inviting reason for investors to choose this platform over others. This will support and significantly influence CAKE’s rate.
As more countries are beginning to impose anti-money laundering regulations, crypto compliance and regulations are always unpredictable. These regulations are changing all the time. If the financial regulators tap on any of the DeFi ecosystems, this will significantly impact the price of CAKE and the other tokens.
PancakeSwap’s rate is expected to rise if the developers introduce new liquidity pools and the number of participants increases. It may continue to introduce more trading features and attractive incentives for investors, boosting PancakeSwap’s value and sending it higher.
News in the media
Any cyber attacks will impact the price of CAKE, like the flash loan attack that happened with the DeFi yield farming aggregator, Pancake Bunny, on May 20. Back in March, there was a DNS spoofing attack on PancakeSwap’s website. But the team acted right away and migrated to a new domain. No users filed any losses, and in two days, all systems were back in business.
Trading on PancakeSwap is easy, compared to most decentralized exchanges. When preparing to trade, the first thing that you need to do is to set up a wallet that is compatible with Binance Smart Chain, since PancakeSwap is built on the BSC. Digital wallets store digital assets and integrate with various blockchains to expedite their transfer. You will also need some BEP-20 tokens to start trading; BEP-20 tokens are used to pay gas fees. Once all is set, you can start trading right away.
PancakeSwap, along with other DeFi protocols, is still a work in progress. Funds deposited into PancakeSwap or other DeFi exchanges can be at risk of smart contract vulnerabilities, malicious developers and exploitation. It is important to be equipped with the proper knowledge; for example, analyzing the CAKE chart and knowing the project well before beginning to trade. With all the risk involved, coupled with the volatility of the crypto market,, it is essential that you are well prepared, and that you take advantage of reliable sites that can help you devise a robust trading strategy that will help you maximize the profit from your investment and minimize trading losses.
CAKE/USD - FAQs
PancakeSwap was built by a group of unnamed developers in September 2020. The one thing that stood out during its launch was that PancakeSwap was created on the Binance Smart Chain (BSC), which offers cheaper and faster transactions compared to Ethereum. CAKE is the native governance token that runs the PancakeSwap ecosystem. You can use it for voting on project proposals, minting NFTs, and purchasing tickets in the PancakeSwap Lottery.
You can purchase CAKE from any of the popular major exchanges, like Gate.io, Binance, Crypto.com, and the like. Create and fund your account via bank transfer or debit card, to complete your purchase. After purchasing, find the best wallet to store your CAKE.
You can keep your CAKE coins on exchanges after purchase, but it is still advisable to use a wallet for security and storage. The most secure option is a hardware wallet, although they cost more than the usual online storage.
CAKE is the native governance token on the PancakeSwap platform. You can use it as a governance token for voting rights in the protocol. You can also sell or trade it to other cryptocurrencies in the PancakeSwap DEX.
The laws governing cryptocurrencies differ from one country to the next. Some have strict jurisdictions, while some allow the use of crypto. As of now, there are no reports of any prohibitions on purchasing CAKE.
There are currently no reports of regulations being imposed on PancakeSwap by the UK financial authorities. You can purchase it along with other cryptocurrencies, provided that you comply with all the legal regulations and requirements on the crypto exchange that you’ll be using.
PancakeSwap comes with some drawbacks and risks, like a non-permanent loss when staking, and just like other platforms, it is prone to hacks and malicious attacks. However, such exploitation is being dealt with by a special team, with the aim of improving security and assurance.