A staggering 98% member of the PancakeSwap community voted in favour of reducing the CAKE supply by 300 million resulting into a strong surge in the CAKE price.
PancakeSwap, a prominent decentralized exchange, has successfully concluded a proposal to reduce the maximum supply of its native token CAKE from 750 million to 450 million, garnering nearly 98% of votes in favor. The multi-chain decentralized exchange initiated the voting process on Thursday, presenting a proposal to decrease CAKE’s maximum token supply.
Also, the voting period has concluded, revealing a decisive 97.88% majority in support of the reduction from 750 million to 450 million.
Anticipated updates to the maximum token supply figures for CAKE will officially reflect on major price-tracking platforms, including CoinGecko and CoinMarketCap, by January 4.
Following the conclusion of the vote, CAKE was trading at $3.70 as of 4:49 a.m. ET. While experiencing a marginal pullback of approximately 1% in the past 24 hours, the token has demonstrated a noteworthy gain of over 49% in the preceding week.
Why Is PancakeSwap Reducing CAKE Supply?
PancakeSwap recently unveiled a proposal to reduce the supply of its native token, CAKE, by 300,000,000 units. Describing this move as a signal of PancakeSwap’s successful transition from a high-inflation emissions model to a more efficient flywheel, the announcement emphasizes the shift towards the goal of achieving “ultrasound CAKE” and signifies the token’s departure from a highly inflationary model. The PancakeSwap team said:
“After achieving consistent deflation in recent months, this latest strategic move to reduce the CAKE token’s total supply to a maximum cap of 450 million CAKE aligns with PancakeSwap’s vision for a robust, deflationary model.”
In the past year, PancakeSwap has undergone substantial transformations in its tokenomics, emissions, and growth strategy. The platform is also set to introduce a vote-escrowed model, enabling CAKE holders to stake their tokens for veCAKE, a concept encompassing staking rewards and incentives. The proposal added:
“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 450 million CAKE. With a current circulating supply of 388 million CAKE, the Kitchen believes this new and lower cap will be sufficient to gain market share across all chains and sustain the veCAKE model.”
The CAKE Price Rally
Over the last week, the PancakeSwap (CAKE) price has rallied by a staggering 50%. At press time, CAKE is trading at $3.69 with a market cap of $900 billion.
For more than a year, the price of the PancakeSwap token experienced a consistent downward trend within the confines of a falling wedge pattern. The converging trendline of this pattern served as a significant point of resistance and support, keeping the downward trajectory within a defined range.
However, propelled by bullish sentiment in the overall cryptocurrency market, the CAKE price hit its bottom at $1.05 and embarked on a new recovery. Over the past ten weeks, the coin’s price has surged by 258%, reaching a new yearly high of $3.79.
During this rally, the coin’s price broke above the upper boundary of the wedge pattern, signaling an early indication of a trend reversal. In an optimal scenario, the CAKE price is anticipated to rally toward the highest point of the wedge pattern, currently at $5.5, representing a potential increase of 58%.