The decentralized autonomous organization (DAO) of the decentralized exchange (DEX) PancakeSwap has proposed a major modification to its total supply of CAKE tokens, seeking to reduce the offer by 300 million units. The proposal, currently approved by over 97% of votes, aims to lower the total CAKE supply from 750 to 450 million tokens, with implementation scheduled for January 4, 2024.
Total supply of CAKE tokens revised downwards
Today, Thursday December 28, the decentralized autonomous organization (DAO) of the decentralized exchange (DEX) PancakeSwap submitted a governance proposal to reduce the total supply of CAKE tokens by 300 million units.
At the time of writing, over 97% of votes cast were in favor of the proposal, which would reduce the total CAKE supply from 750 to 450 million tokens. According to the proposal, PancakeSwap developers believe this change is necessary in order to “gain market share”:
“With a current total supply of 388 million CAKE, the Kitchen believes this new, lower cap will be sufficient to gain market share across all channels and support the veCAKE model. “
The voting phase will only last 24 hours, which means that the final result will therefore be known tomorrow. However, it seems highly likely that the proposal will be accepted. Should this be the case, it will take effect on January 4.
The CAKE share price rose on publication, although it subsequently fell back. The CAKE token is currently trading at around $3.7.
Evolution of the CAKE token price
Referring to “Ultrasound Money”, a meme according to which Ether would be a healthy currency whose value would naturally increase over time via a deflationary process introduced when the Ethereum blockchain switched to Proof of Stake, the developers explained that CAKE was also on the way to Ultrasound Money:
“Now that CAKE has reached steady deflation for several months and we are focused on accelerating our journey to Ultrasound CAKE, this proposal aims to reduce the total supply of CAKE tokens to a maximum cap of 450 million CAKE. “
With $1.66 billion in total locked value (TVL), PancakeSwap is a leading decentralized application (dApp) in the ecosystem. The inflation of its CAKE token has long been considered a problem, and has already earned some modifications to its tokenomics through its DAO.
