PancakeSwap, one of the most popular decentralized exchanges (DEX), recently proposed a significant revision in the supply of its native token, CAKE. In an effort to align the token with its current circulating supply of 388 million, developers aim to reduce the maximum supply from 750 million to 450 million CAKE. This proposal, subject to a vote, could take effect on January 4, 2024, marking a significant step in the evolution of the token’s economy.
The team behind PancakeSwap highlighted CAKE’s previous achievements in achieving consistent deflation over several months. According to developers, this proposal seeks to expedite the path towards a more robust deflationary model, in line with the project’s long-term growth goals.
Since its launch in September 2020, CAKE underwent significant changes in its initial emission, which was 40 per block, resulting in an annual inflation rate of nearly 80%. However, over time, the team implemented various measures to reduce inflation, such as adjusting emissions in the Syrup Pool and a token burn mechanism.
PancakeSwap Community Fully Trusts the Team’s Vision
The PancakeSwap community, consisting of CAKE holders, overwhelmingly responded positively to the supply reduction proposal. With over 99.95% of votes favoring the measure, representing 70,000 votes from the community, the proposal gained strong support. This massive endorsement underscores the community’s confidence in the team’s long-term vision and their ability to implement significant changes effectively.
PancakeSwap’s leader, Chef Mochi, stated that this supply reduction will position the project to pursue further growth across all deployments. With a current circulating supply of 388 million tokens, the team believes the new lower cap will be sufficient to gain market share across various chains and sustain the veCAKE model sustainably.
The market also responded positively to the proposal, with a 10% increase in the price of CAKE in the last 24 hours, bringing the price of each token to $3.7, highlighting investors’ confidence in PancakeSwap’s strategic decisions.