PancakeSwap’s CAKE Token Rises as Proposal to Reduce Supply Gains Support
The native token of decentralized exchange (DEX) PancakeSwap, known as CAKE, has seen a nearly 7% increase following a proposal to reduce its maximum token supply. Currently trading at $3.77, CAKE has risen by 6.8% in a day and 40% in the last seven days, according to data from CoinGecko.
Support for Supply Reduction Proposal
A proposal to slash the maximum supply of CAKE by 300 million to 450 million has received widespread support from the community of token holders. Over 90% of voters have favored the proposal so far, which will remain open for voting until December 29. The proposal aims to provide certainty to the community regarding the future token supply of CAKE.
Transitioning Away from Hyperinflationary Model
The PancakeSwap team, also known as the “chefs,” explained that there was significant token inflation after the DEX’s launch in 2021 to bootstrap its ecosystem. However, after three years of development, they now have more accurate estimations of incentives required for growth targets. The reduction in supply represents a shift away from a hyperinflationary tokenomics model.
CAKE Still Far from All-Time High
Despite the recent increase, CAKE still has a long way to go before reaching its all-time high of nearly $44 in April 2021.
Expanding and Launching New Initiatives
PancakeSwap has been actively expanding its presence in the crypto space. In August 2023, it joined the Coinbase-incubated Base layer-2 network and Ethereum layer-2 scaling network Linea as part of its multi-chain expansion strategy. Additionally, the DEX recently launched its own crypto gaming marketplace featuring tower defense game Pancake Protectors and city-building sim Pancake Mayors.
Hot Take: CAKE Token Rises Amidst Support for Supply Reduction Proposal
The proposal to reduce the maximum token supply of PancakeSwap’s CAKE token has gained significant support from the community, leading to a surge in its price. This shows that investors and token holders are confident in the team’s efforts to provide certainty and transition away from a hyperinflationary model. With ongoing expansions and new initiatives, PancakeSwap continues to establish itself as a prominent player in the decentralized exchange space. However, it remains to be seen whether CAKE can reach its previous all-time high, as it still has a considerable distance to cover.
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