The PancakeSwap Developers Propose to Reduce CAKE Token Supply
The developers of the decentralized exchange (DEX) PancakeSwap have initiated a vote to decrease the tokens within their CAKE ecosystem. The proposal aims to reduce the total supply of CAKE tokens from 750 million to 450 million. Voting will be open for 24 hours, and if approved, the change will take effect on January 4, 2024.
“Now that CAKE has achieved consistent deflation for several months and is focusing on accelerating our journey to ultrasound CAKE, this proposal aims to reduce the CAKE token’s total supply to a maximum cap of 450M CAKE.”
PancakeSwap blog
Price Surge in Response to the Proposal
The price of CAKE experienced a 6.5% increase following the launch of the proposal. CoinMarketCap data shows that the token’s price rose by $3.74 in the past 24 hours. Additionally, the token’s market capitalization reached $999.4 billion.
Empowering CAKE Holders with the veCAKE Model
Chef Mochi, the head of PancakeSwap, highlighted that the current turnover of 388 million CAKE supports the belief that the lower capitalization resulting from the token supply reduction will be sufficient to gain market share across all networks. This move is also intended to support the veCAKE (vote-escrowed) model, which aims to enhance governance influence for CAKE holders, boost liquidity in pools, and increase rewards for stakeholders.
Hot Take: The Impact of Reducing Token Supply on PancakeSwap’s Future
The vote to reduce the CAKE token supply on PancakeSwap has generated significant interest and resulted in a price surge. If approved, this change could have a positive impact on the ecosystem by enhancing governance influence and liquidity. It remains to be seen how this reduction will affect the market share and long-term sustainability of PancakeSwap as it continues its journey towards ultrasound CAKE.
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