CAKE's Deflationary Gamble Pays Off as Price Surges 70%
Aime SummaryPancakeSwap's native token, CAKECAKE--, has surged over 70% in the past week, trading near $4.32 as of October 8, 2025, driven by a combination of product upgrades, deflationary mechanics, and increased on-chain activity [2]. The token's 24-hour trading volume exceeded $1.23 billion, marking a 88% increase, as the platform solidified its position as the second-largest decentralized exchange (DEX) globally [2]. This rally follows the launch of CAKE.PAD, a streamlined token launch platform designed to simplify early access to new projects while permanently burning participation fees to reduce circulating supply [1].
The CAKE.PAD initiative replaces PancakeSwap's Initial Farm Offering (IFO) model, eliminating staking pools and lock-up periods. Users now commit CAKE directly to events, with no barriers to claiming new tokens post-event [1]. All fees collected through CAKE.PAD are burned, accelerating deflationary pressure. Over 339,000 CAKE tokens were burned in Q3 2025 alone, reducing the total supply from 750 million to 450 million since 2023 [2]. This mechanism aligns with PancakeSwap's goal to cut CAKE supply by 20% by 2030 [4]. The platform also introduced a tiered subscription tax system during oversubscribed events to maintain fairness, further enhancing CAKE's utility and scarcity [1].
On-chain metrics underscore CAKE's growing demand. Whale accumulation intensified, with large holders increasing their holdings from 1.41 million to 2.96 million CAKE in less than a year [3]. Total Value Locked (TVL) in the PancakeSwapCAKE-- ecosystem rose to $2.8 billion, up from $1.57 billion year-to-date. Cross-chain expansion to networks like Coinbase's Base and SolanaSOL-- has added $85 billion in 30-day trading volume, broadening liquidity sources and reinforcing CAKE's role as a multi-chain asset [2].
Technical analysis highlights bullish momentum. CAKE's price has broken above key resistance levels, including the $3.3117 threshold, and remains above its 50-day and 100-day exponential moving averages (EMA) [3]. The MACD indicator flipped bullish, with the line crossing above the signal line, while the RSI approaches overbought territory at 72 [2]. Bollinger Bands confirm sustained buying pressure, with the price holding above the middle band. Analysts note that a breakout above the $4.30–$4.50 range could position CAKE as a leading DeFi asset, though a pullback to $2.70 is possible if BitcoinBTC-- corrects [1].
PancakeSwap's deflationary strategy faces scrutiny as some competitors adopt inflationary models with tokenized incentives. However, the platform has opted to retain its burn-driven approach, avoiding token minting for staking rewards. Weekly burn events, such as the $34 million CAKE burn in December 2024, demonstrate consistent supply reduction . Critics argue that CAKE's inflationary issuance in early 2020–2022 diluted value, but ongoing burns and a capped supply of 450 million tokens aim to address these concerns .
Looking ahead, the launch of PancakeSwap V4 in December 2025 is anticipated to drive further adoption. The update will introduce advanced liquidity management and stablecoin trading optimizations, mirroring UniswapUNI-- V4's features . Analysts at 99Bitcoins suggest that sustained demand and a successful V4 rollout could push CAKE toward $10, contingent on broader crypto market conditions [4].
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