Many ways exist for blockchains and dApps to become long-term powerhouses. Networks like Bitcoin and Ethereum will remain relevant for various reasons, including their token incentives. However, one shouldn’t overlook PancakeSwap – and $CAKE – and other dApps; their earnings will often go negative to bring value to users.
PancakeSwap Has Tremendous User Incentives
Most people know PancakeSwap as the leading decentralized exchange on the BNB Chain. It is akin to Uniswap but supports a different network. Users can provide liquidity to earn trading fees. However, they can also stake their LP tokens to earn additional rewards in $CAKE tokens. Making things more interesting is the option to stake $CAKE for more $CAKE rewards. Users can compound their earning potential, leading to a high outflow of “earnings.”
More specifically, the data from Token Terminal shows a steep outflow of earnings. Not because PancakeSwap doesn’t have revenue – it generated $4.5 million in the past month. However, the same 30-day period yielded $34.4 million in token incentives. Those are rewards to users in $CAKE tokens.
One may think those incentives make PancakeSwap a very unprofitable dApp on BNB Chain. However, that is not the case for the users or the service’s developers. The project generates more than sufficient revenue – on par with dYdX and nearly double that of GMX – but that is not what the dApp was designed for. Instead, it aims to facilitate token exchanges in a decentralized manner. It does that job rather well. Additionally, its prediction market has proven successful.
Furthermore, the Dune Analytics statistics show the platform maintains a healthy amount of transactions. It is not uncommon to see roughly 300,000 transfers per day. Of course, maintaining such market dominance is no easy feat. Even so, PS seems to hold its own rather well, even if some days see more activity than others. That said, there isn’t necessarily much growth to speak of, either.
$CAKE Sentiment Remains Bullish
Investors must explore risky opportunities as the crypto markets continue to suffer from bearish pressure. Native protocol tokens often suffer from a lack of enthusiasm. That is not the case for $CAKE. Despite the high user incentives issued by PancakeSwap, $CAKE saw its bullish momentum almost double this past month. Granted, there is a steep increase in bearish sentiment too, but that is par for the course.
What is interesting is how $CAKE has gained tremendous social activity in the past 30 days. Its Twitter volume nearly doubled, and there is a nearly 25% increase in YouTube content. Activity has quieted down on Reddit and Medium, but the momentum seems cautiously optimistic overall.
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