If authorized, the $1.074 billion token decrease would go into effect on January 4, 2024.
Declining the maximum quantity of its ecosystem token, CAKE, from 750 million to 450 million is the goal of developers of the decentralized exchange (DEX) PancakeSwap. The current trading price for one CAKE token is $3.58.
The notification about the 300 million token decrease states that the vote proposal will be open for 24 hours, starting on December 28. Jan. 4, 2024, is the proposed effective date.
Developers stated that the new proposal will bring CAKE in line with its current circulating supply of 388 million tokens and that the goal is to reduce the total supply of the cryptocurrency. This comes after CAKE has experienced consistent deflation for several months and is now concentrating on speeding up the process to ultrasound CAKE.
There was an 80% annual inflation rate when CAKE was launched in September 2020 with a net emission rate of 40 per block; since then, it has been going downhill. Staking incentives include CAKE for users.
Token holders gave their stamp of approval to a plan on April 25 to reduce CAKE Syrup Pool emissions from 6.65 CAKE/block to 3.0 CAKE/block, with a half-cent reduction every block for five months. Because of the token burn mechanism and other factors, CAKE tokens are now deflationary overall.
“After nearly three years in development, the team now has a more precise estimate of the incentives required to achieve growth targets,” the creators of PancakeSwap said. “Lowering the total supply is a critical step toward achieving ultrasound CAKE and sending a clear signal of PancakeSwap’s pivot away from a hyperinflationary tokenomics model.”
One of the most well-known DEXs right now is PancakeSwap. With a total of $1.64 billion locked up as of publishing, the DEX is projected to earn $191 million in protocol income every year.
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