The native token of a decentralized exchange (DEX) is heating up after news broke that it was receiving an investment from the venture capital wing of crypto behemoth Binance.
Today, Binance Labs announced it has invested an undisclosed amount in PancakeSwap (CAKE).
Binance says the investment will provide both technological and marketing support as part of a broader push for blockchain adoption as Web 3.0 transforms the internet.
PancakeSwap utilizes an automated market maker (AMM) with constantly updating exchange rates to bypass the need for order books or having to rely on a central trading marketplace such as Binance and Coinbase.
According to the project website, the CAKE token enables a variety of functions including voting, staking and farming.
Head of Binance Labs Bill Qian says of the decision to invest in the decentralized application (DApp),
“PancakeSwap has been leading the development and mass adoption of BNB Chain.
Given that PancakeSwap is the most widely used DApp and the DeFi project with the highest TVL on BNB Chain, we have and will continue to provide strong support for the project.”
The total value locked (TVL) of a blockchain represents the total capital held within its smart contracts. The metric is calculated by multiplying the amount of collateral locked into the network by the current value of the assets.
PancakeSwap is currently the ninth-largest blockchain protocol in terms of TVL at $3.89 billion, according to analytics platform DeFi Llama.
News of the Binance listing initially sent PancakeSwap up by about 10% from $4.38 to $4.82.
After a slight correction, CAKE has risen again by 5.79% on the day and is priced at $4.67.Don't Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
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Featured Image: Shutterstock/morokey/Nikelser Kate