PancakeSwap 300M CAKE token supply needs update
Decentralized exchange (DEX) developers PancakeSwap are looking to reduce the maximum ecosystem token CAKE from 750 million to 450 million. CAKE tokens are currently trading at $3.58 at the time of writing.
According to the December 28 announcement, the voting proposal for the reduction of 300 million tokens will last for 24 hours. If approved, the proposal would take effect on January 4, 2024.
“Now that CAKE has been experiencing consistent price declines for months and focusing on accelerating the journey to ultrasound KK, the proposal aims to reduce the total supply of CAKE tokens,” the developers wrote. A supply of 388 million.
At the time of its inception in September 2020, CAKE had a net emission rate of 40 per block, with annual inflation of nearly 80% and declining thereafter. Users will receive CAKE as part of the rewards.
On April 25th, token holders approved a proposal to adjust the CAKE Syrup Pool release rate from 6.65 CAKE per block to 3.0 CAKE per block, which would reduce the amount by 0.5 CAKE per block per month for five months. Coupled with the token burning mechanism, CAKE tokens have since declined on a net basis.
“After nearly three years of development, the team now has more accurate estimates of incentives needed to meet development goals,” said the Pancake Swap developers. “Decreasing the total supply is a critical step in getting the ultrasound CAKE and sending a clear signal away from the PancakeSwap pivot away from the hyperinflationary Tokonomics model.”
Related: PancakeSwap partners with Bril to add portfolio manager functionality
PancakeSwap is currently one of the most popular DEXs. At the time of publication, DEX had a total cap of $1.64 billion and was expected to generate $191 million in annual protocol revenue.
