- PancakeSwap’s community strongly supports reducing the token supply from 750 million to 450 million, aiming to boost the CAKE token’s value and investor incentives.
- CAKE’s price soars by 77% following token burns and supply cut proposal, reaching $3.96, while the market cap rises to $1.05 billion.
The PancakeSwap community has shown resounding support for a proposal to reduce the network’s token supply from 750 million to 450 million. The voting process, initiated by the PancakeSwap team on December 28, 2023, has garnered over 95% of votes in favor of the token supply cut.
🐰💙PancakeSwap Fam, the moment is here!
🥞Proposal to reduce the max supply of $CAKE from 750M to 450M!
🌟By reducing our token supply by 300,000,000 $CAKE, we signify PancakeSwap’s successful shift from a high-inflation emissions model to the Ultrasound CAKE era.
🗳Vote for… pic.twitter.com/3zCzoBBiRl
— PancakeSwap🥞Everyone’s Favorite DEX (@PancakeSwap) December 28, 2023
This action comes off as a calculated attempt to counteract sustained declines in the value of the CAKE token and give investors more precise incentives. 732 individuals cast votes to decide whether to approve or reject the proposal to reduce the supply of tokens.
96.71% of these users supported the idea, with the remaining 3.29% voting against it. The voting panel will adjourn on December 29, 2023, one day after the vote was started.
The overwhelming support for this proposal is from the PancakeSwap community, which comprises approximately 70,000 CAKE token holders. This underscores the desire for change and optimization within the platform.
Growth and User Activity
Despite PancakeSwap’s remarkable $12 billion in trading activity over the past month, which places it as the third-largest decentralized finance (DeFi) protocol in terms of trading volume. Notably, since February, there have been worries about dwindling net deposits.
Net deposits measure the difference between tokens added to and removed from liquidity pools on the platform. A decrease in net deposits suggests lesser trading volume and possibly less liquidity.
However, the platform has experienced steady growth in active monthly users, with a notable 29% increase since January. In the current month, 1.8 million addresses have engaged in at least one transaction on the PancakeSwap exchange.
The financial metrics of PancakeSwap have decreased in the past few months. Network fees have decreased by 40% from $17.3 million in May. Similarly, protocol revenue has dropped by 45% since May, when it was $5.6 million. These indicators show the difficulties the platform is facing despite the high level of user activity.
CAKE Token Price Performance
Surprisingly, since the plan to reduce the token supply arose, the price of the cryptocurrency CAKE has been rising. The price continued to rise, getting close to $4 on the day the voting panel opened. With its current price of $3.68, CAKE has gained a noteworthy 2% during the past 24 hours.
The price has increased by an amazing 77% in the past month, with weekly gains above 55%. The market capitalization of CAKE has increased because of these increases, and it currently stands at $895 B, with a 9.66% rise.
The recent rally in CAKE’s price can be attributed, in part, to the PancakeSwap team’s decision to burn over 10 million tokens, amounting to $34 million. This token burn led to a 20% price surge. Furthermore, the network plans to conduct regular token burns, potentially contributing to further gains for the CAKE token.
A Bright Future Ahead
Members of the PancakeSwap team have expressed their optimism about the platform’s future following the proposed token supply cut. Chef Mochi, the leader of PancakeSwap, believes that the reduction in CAKE’s total supply, currently at 388 million, will facilitate expansion into different platforms and help maintain the veCAKE system.
Read the full article here