Adobe Stock / JorgeEduardo
Decentralized cryptocurrency exchange, PancakeSwap plans to reduce the total supply of CAKE after a community proposal was announced to sustain its development roadmap.
The team proposed the reduction via a community forum highlighting the development recorded so far and the need to improve tokenomics taking the platform to the next level.
The new proposal seeks to reduce the total supply from 750 million tokens to 450 million tokens and with a circulating supply of 388 million CAKE, some community members believe the lower cap an help it gain sufficient market share across networks.
“Now that CAKE has achieved consistent deflation for several months and is focusing on accelerating our journey to ultrasound CAKE, this proposal aims to reduce the CAKE token’s total supply to a maximum cap of 450m CAKE.”
Still, in its early stages, members of the community are urged to discuss the proposal before voting. The platform has recorded significant progress which can be seen from the CAKE tokenomics v2.5 and the veCAKE system promising to improve emissions, and a growth strategy.
The team raised several reasons for the proposed development ranging from certainty for the community on the platform’s token supply to boost its roadmap to ultrasound CAKE and to ensure flexibility for growth.
According to the forum’s post, reducing 300 million tokens will give the community more accurate projections of incentives meant to achieve growth adding that more gains will be recorded since it launched in 2021.
”total supply is an important metric when understanding the impact of token burns and future emissions. Lowering this number is a critical step to achieve ultrasound CAKE and to send a clear signal of PancakeSwap’s pivot away from the hyperinflationary tokenomics model.”
More efforts on community engagement
It added that 450 million CAKE is necessary to spur new growth and gain market share in Ethereum and Ethereum layer 2 networks.
The markets responded positively to this development with the asset price recording gains in the last 24 hours. The asset soared 18% in the last day tapping $2.60 before a slight correction dragged the token to $2.50 at press time.
Trading volumes on the platform recorded a 175% spike in the last 24 hours. The exchange has always stressed community engagements which can be seen in its roadmap and recent activities.
The community’s airdrop is now live giving users $500 and governance tokens improving internal management of the platform.
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