- PancakeSwap unveiled a proposal to reduce CAKE’s total supply to 450 million.
- The proposal wants to reduce CAKE’s present total supply of 750M by over 300M.
- CAKE’s price surged 23% following the announcement by the platform.
Today, decentralized exchange (DEX) platform PancakeSwap opened discussions on a proposed plan to reduce CAKE’s total supply, a post on its website reveals. The proposal, which seeks to reduce CAKE’s total supply by over 300 million, has since sent the token’s price up.
Indeed, the exchange is seeking input from its community members on its goal to reduce the CAKE token’s total supply to a maximum cap of 450 million. The proposal follows months of what the platform called “consistent deflation” through several token burns.
At present, there are over 388 million CAKE in circulation—a drop aided by the consistent token burns. In total, CAKE has a present total supply of 750 million. Currently, each CAKE token is worth $2.76, data from CoinMarketCap shows.
PancakeSwap stated that the proposal is a commitment to its plan to pivot CAKE to a deflationary model called “Ultrasound Cake.” On why this is important, PancakeSwap highlighted several rationales behind the proposal.
First, the platform said that a lower overall supply ensures precise estimates of the incentives needed to meet its growth targets. Furthermore, PancakeSwap highlighted the proposal as a key step in moving away from a hyperinflationary tokenomics approach.
Additionally, the DEX said the token reduction will help ensure sufficient flexibility for growth. Along the same lines, the platform believes the new and lower cap will be sufficient to gain market share across all chains and sustain the veCAKE model.
The proposal follows a more aggressive burn undertaken by the platform in recent times. Meanwhile, the announcement by the platform appears to have been positively received by investors, given the surge in CAKE’s value.
Following a spat of price drops, CAKE’s value has seen a remarkable 23% gain in the past 24 hours. Most of the uptick came after the announcement by the DEX. As a result, the token has now erased the losses it previously recorded on the weekly and monthly charts.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
