PancakeSwap Proposal: CAKE Token Supply Limit Reduced by 300 Million, Approval Rate Reaches 90%

The top three decentralized exchanges PancakeSwap, after introducing the veCAKE mechanism, have once again released a governance proposal to reduce the token supply by 3 billion tokens. This restructuring of the token economy is quite proactive, but the token price has not responded much.

Will PancakeSwap's launch of veCAKE trigger a new round of DeFi wars?

PancakeSwap Proposal: Token Supply Cap Reduced by 300 Million

The official PancakeSwap Twitter account released a proposal on the afternoon of the 28th to reduce the maximum supply of CAKE from 750 million to 450 million, stating that this change will improve the initial high-inflation coin issuance model.

🐰💙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

The governance proposal stated that PancakeSwap has made significant improvements to token economics, inflation issuance mechanisms, and achieved several months of token deflation. In order to focus more on this, it was decided to change the CAKE supply cap to 450 million.

Currently, the circulating supply of CAKE is 388 million. The official team believes that the new supply cap is sufficient to compete in market share across chains and maintain the veCAKE token model.

As of the deadline, the approval rate is as high as 92.65%.

CAKE Price Reacts Slightly

CAKE had already risen by 32% to $3.79 on the 26th. After the PancakeSwap tweet, CAKE rose again, but only by 10%.