Key takeaways:
- Binance Labs has made a “strategic investment” in PancakeSwap, a leading decentralized exchange on BNB Chain
- The investment comes on the heels of Binance Labs’ $500 million venture capital fund launch last week
- The price of CAKE increased nearly 10% on the news
Binance Labs invests in the leading dApp on BNB Chain
Binance Labs, a venture capital arm of the world’s largest cryptocurrency exchange, has announced a “strategic investment” in PancakeSwap (CAKE), one of the largest decentralized exchanges (DEXs) in the industry and the most popular DeFi project on BNB Chain.
According to a blog post, the investment is meant to “facilitate the next wave of global blockchain adoption” for “Web3 transformation.” The exact amount of CAKE tokens bought was not disclosed. CAKE is the native governance and utility digital assets of the PancakeSwap platform, used to pay for transaction fees and to participate in the community-led decision-making process. Binance Labs lead Bill Qian had this to say about the move:
“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.”
PancakeSwap is one of the most popular automated market makers (AMMs) in the sector, with over 400,000 daily active users. According to data curated by DeFiLlama, PancakeSwap accounts for roughly 45% of the total value locked (TVL) on BNB Chain, with $3.88 billion. BNB Chain is the second largest DeFi ecosystem in the world, trailing only Ethereum, which accounts for a whopping 65% of TVL across all chains. For additional context, Uniswap (the largest DEX on Ethereum) has a TVL of $5.82 billion, or roughly 8% of the total TVL on Ethereum.
In related news, last week, Binance Labs launched a $500 million investment fund to back Web3 projects. The fund was launched in partnership with DST Global Partners, Breyer Capital, and several other prominent corporate investors.
The news of Binance Labs’ PancakeSwap investment pushed CAKE to its multi-week high of $4.84. The token is showing a 24-hour price change of roughly 7% at press time. At one point earlier today, the token was showing 24-hour gains of close to 10%.
