PancakeSwap’s CAKE Token Drops Over 20% Following Proposed Changes to Tokenomics

By 0xK2 On Apr 28, 2023

In recent days, PancakeSwap’s token CAKE has seen a significant drop of over 20% in its value, following the proposed changes to its tokenomics, which have not been well received by the community. PancakeSwap, the leading DEX on the BNB Chain, had proposed to adjust the supply of CAKE tokens to reduce inflation from 20% to only 3-5%.

However, this proposal also includes a reduction of up to 68% in the rewards given to traders and stakers. This move has caused many users to abandon the DEX, which has led to the significant drop in the price of the CAKE token, currently trading at $2.66 USD. The vote on the proposal showed a split, with 41.63% in favor, 56.42% against, and the remaining users choosing various levels of inflation.

According to PancakeSwap, the project will only implement the plan if more than 50% of the users agree. With over 1.5 million users, PancakeSwap is the leading DEX on the BNB Chain, and it has recently launched its V3 version with new unique features. In May 2022, the platform had proposed to limit the supply of CAKE tokens to 750 million, instead of an unlimited supply.

Currently, there are approximately 193 million CAKE tokens in circulation, and if the new proposal is accepted, the supply of CAKE tokens is expected to decrease significantly in the future. This proposal is an effort to control inflation and stabilize the value of the CAKE token, but it has not been well received by the community due to the reduction in rewards for traders and stakers.

PancakeSwap has not yet announced the next steps for the proposal, but it is likely that they will continue to work on a solution that addresses the concerns of the community while also achieving their goals of reducing inflation and stabilizing the CAKE token’s value. It remains to be seen how this proposal will affect the future of PancakeSwap and the value of the CAKE token.

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