PancakeSwap Proposes to Cut CAKE Token Supply from 750M to 450M
Summary:
PancakeSwap, the decentralized exchange (DEX), is proposing to cut the maximum supply of its CAKE tokens from 750 million to 450 million. The 24-hour voting for the proposal, announced on December 28, will implement the cut by January 4, 2024, if approved. The CAKE token, which has demonstrated consistent deflation, is being primed for an accelerated transition to 'ultrasound' status. The move aligns with the current circulating supply of 388 million and moves away from a hyperinflationary model.
The team behind the decentralized exchange (DEX), PancakeSwap, is proposing a reduction in the total supply of its native token, CAKE, from 750 million to 450 million pieces. The prevailing market price for CAKE tokens stands at $3.58. As per the announcement made on December 28, the voting process for this proposal to cut down 300 million tokens is slated to run for 24 hours. Should the proposal gain approval, it will be implemented from January 4, 2024.
Developers observe that the CAKE token has consistently shown deflation over several months, and this proposal is an effort to accelerate its path to becoming an ultrasound CAKE. The idea is to bring the total supply of the CAKE token in line with the current circulating supply of 388 million. With a net emission rate of 40 per block at its launch in September 2020, CAKE had an annual inflation rate around 80%, which has been consistently decreasing since then. CAKE tokens are offered as rewards for staking.
A proposal approved on April 25 saw the emission of CAKE Syrup Pool declining from 6.65 CAKE per block to 3.0 CAKE per block, with a subsequent reduction of 0.5 CAKE per block each month for five months. This, along with a token burn mechanism, has resulted in a net deflationary nature for CAKE tokens.
The PancakeSwap team stated that after almost three years, they now have better understanding of the incentives needed for realizing growth goals. The reduction in total supply is considered a vital move towards ultrasound CAKE and demonstrates PancakeSwap's shift from a hyperinflationary tokenomics model.
Currently, PancakeSwap stands as one of the top-rated DEXs. As of press time, it boasted a total value locked (TVL) of $1.64 billion and is forecast to rake in $191 million in annualized protocol revenue.
Published At
12/28/2023 11:00:00 AM
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