March 27, 2024
PancakeSwap Proposes 300M CAKE Token Reduction
Latest Cryptocurrency News

PancakeSwap Proposes 300M CAKE Token Reduction

PancakeSwap’s decentralized exchange (DEX) developers are proposing to cut the maximum supply of the ecosystem token, CAKE, from 750 million to 450 million. As of now, CAKE tokens trade at $3.58.

In a Dec. 28 announcement, it was revealed that the voting window for the 300 million token reduction proposal will span 24 hours. If sanctioned, the reduction will be effective on Jan. 4, 2024.

The rationale behind the proposal lies in CAKE’s sustained deflation over several months and its focus on advancing toward ultrasound CAKE. The adjustment seeks to align CAKE with its existing circulating supply of 388 million.

CAKE, introduced in September 2020, initially had a net emission rate of 40 per block, translating to an inflation rate of approximately 80% annually. Over time, this rate has steadily decreased, with users earning CAKE through staking rewards.

On April 25, token-holders greenlit a proposal modifying CAKE Syrup Pool emissions from 6.65 CAKE per block to 3.0 CAKE per block, gradually reducing by 0.5 CAKE per block monthly for five months. Coupled with a token burn mechanism, CAKE tokens have transitioned to a deflationary status on a net basis.

After nearly three years of development, PancakeSwap developers underscored the importance of the total supply reduction in achieving ultrasound CAKE and signaling a shift away from hyperinflationary tokenomics. PancakeSwap presently stands as one of the leading DEXs, boasting $1.64 billion in total value locked and anticipating $191 million in annualized protocol revenue at the time of publication.

Image By rorozoa

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