Deflationary Token Journey for CAKE

PancakeSwap announces a new Emission Reduction Proposal for CAKE and invites community members to vote on it.

As announced by the major decentralized exchange globally on June 23, the main goal of this new emission reduction proposal project is to help CAKE become "emission-neutral" or "deflationary.” That means the number of CAKE burned in each block will be more than the number of CAKE minted, thereby giving CAKE more upside momentum in the future because of the scarcity of the token. Voting will occur on June 23 and end on June 25.

However, there’s one catch – reducing CAKE distribution to the farm will harm user rewards. 

“If we were to burn one additional CAKE per block, our CAKE-BNB APR may drop by roughly 12%. This will likely negatively impact our platform's liquidity and affect the many projects we support here on PancakeSwap,” the developers mentioned in the new proposal.

To solve this problem, maintain users' benefits and encourage exchange liquidity, PancakeSwap will make three recommendations: no change, 0.25 CAKE per block reduction, and 0.50 CAKE per block reduction.

"Based on community feedback, PancakeSwap has restarted the emission reduction proposals," Chef Icy told BSC News. "These proposals are part of our toolbox in achieving our long-term goal of deflationary tokenomics, and they are increasingly important under current market conditions.

To learn more about how PancakeSwap's new emissions reduction proposal model impacts APR, visit here.

‍

Leading the DeFi Industry

Currently, the amount of CAKE sent to Syrup pools and Farms has decreased from 40 CAKE/block to only 14.25 CAKE/block. Furthermore, the number of CAKEs burned during the distribution process and through the weekly transaction fees and developer wallets has been steadily increasing over the past few weeks. 

A governance vote open to the community in May saw an absolute majority of 98.80% of users support PancakeSwap's proposal to limit the maximum supply of CAKE to 750 million tokens instead of infinite.

“We feel that some of the other max token supply proposed for other dexes were too low (ranging from 1 to 2 years from now), raising the question of long-term sustainability. We, therefore, chose a runway of ~ three years, as we believe that is sufficient time for sustainable practices to be fine-tuned and implemented,” PancakeSwap mentions in the recent V2 litepaper. 

If the new emission reduction proposal is approved by the community, combined with improved Tokenomics with limited supply, this will surely be a great launch pad to help CAKE become more scarce in the long-term game, creating a premise for the strong growth of the project in terms of price.

"We are also encouraged that there were more than 17 million votes cast (for all the different options) in this proposal, which reflects the high level of engagement and belonging present in our community," Chef Icy continued. "These proposals shape the direction of PancakeSwap, and we look forward to continuing and increasing our community’s participation in these discussions."

Overall, with such a unique strategic difference, it can be affirmed that PancakeSwap is trying very hard to prove its leading position in the DeFi industry in general and BNB Chain in particular during the current bear market period. Therefore, there is no doubt that Binance Labs, the investment fund of the Binance exchange, actively supported PancakeSwap through a strategic investment round that took place in early June.

‍

What is PancakeSwap:

PancakeSwap is a Decentralized Exchange (DEX) built on BNB Chain. It offers users various features such as Liquidity Pools, Swapping, Yield Farming, Syrup Pools, Automated Market Maker, Initial Farm Offering (IFO), NFT profile system, and many others. 

In addition, the protocol helps users make the most out of their crypto assets by trading, earning through yield farming, and winning via lottery, prediction, and NFT collectibles. PancakeSwap is the leading DEX on the BNB Chain with the highest trading volumes in the market. 

Where to find PancakeSwap: 

Website | Twitter | Medium | GitHub |

‍

What is BNB Chain:

Previously known as the BNB Chain (BSC), BNB Chain is a community-driven, decentralized, and censorship-resistant blockchain-powered by Binance. It consists of BNB Beacon Chain and BNB Smart Chain, EVM compatible and facilitating a multi-chain ecosystem. Furthermore, through the concept of MetaFI, BNB Chain aims to build the infrastructure to power the world’s parallel virtual ecosystem.

Find more about BNB Chain here:

Website |  Twitter | Discord | Telegram | GitHub |

‍

Don’t forget to download the BSC News mobile application on iOS and Android to keep up with all the latest news for BNB Chain and crypto! 

‍Follow us on Twitter and Instagram!     

‍If you need tools and strategies regarding safety and crypto education, be sure to check out the Tutorials, Cryptonomics Explainers, and Trading Tool Kits from BSC News.

‍Check out the Web3Wire Linktree to keep up with all relevant Web3 and Crypto!

‍Looking for a job in crypto? Check out the CryptoJobsNow!