The $300 million token reduction, valued at $1.074.074 billion, will go into effect on January 4, 2024, if approved.
The maximal supply of the ecosystem token CAKE, created by the decentralized exchange (DEX) PancakeSwap developers, is intended to be reduced from 750 million to 450 million. The current market value of CAKE tokens is $3.58 as of the time of this writing.Â
An announcement made on December 28 states that the voting proposal to reduce 300 million tokens will be open for 24 hours. The proposal will become effective on January 4, 2024, if approved.
“Now that CAKE has achieved consistent deflation for several months and is focusing on accelerating the journey to ultrasound CAKE, the proposal aims to reduce the CAKE token’s total supply,” developers wrote, adding that the new proposal will better align CAKE with its current circulating supply of 388 million.
Since its establishment in September 2020, CAKE has experienced a consistent decline in its net emission rate from $40 per block, equivalent to an annual inflation rate of approximately 80%. CAKE is distributed to users as a staking reward.
A proposal to reduce CAKE Syrup Pool emissions from 6.65 CAKE per block to 3.0 CAKE per block, with a monthly reduction of 0.5 CAKE per block for five months, was approved by token-holders on April 25. CAKE tokens have had net deflationary effects since their introduction with a token fire mechanism.
“After nearly three years in development, the team now has more accurate estimations of incentives required to achieve growth targets,” the developers of PancakeSwap stated.”Lowering the total supply is a critical step to achieve ultrasound CAKE and to send a clear signal of PancakeSwap’s pivot away from a hyperinflationary tokenomics model.” Â
At this time, PancakeSwap is among the most widely used DEXs. As of the publication date, the DEX had locked in a total of $1.64 billion in value and was anticipated to generate annualized protocol revenue of $191 million.
