• PancakeSwap has passed a decision proposal that makes its native token, CAKE, scarcer.
• The proposal adjusts the tokenomics model to favor longer-term CAKE stakers and reduces incentives for traders and stakers by more than 68%.
• It reduces CAKE emissions on PancakeSwap’s Syrup Pool by 94%, aiming to decrease the annual inflation rate from 21% to 3%-5%.
PancakeSwap Passes Proposal to Make CAKE Scarcer
PancakeSwap, a leading decentralized exchange (DEX) on the BNB Smart Chain (BSC), has passed a decision proposal that changes their native token’s tokenomics. The proposal aims to make CAKE scarcer and benefit long-term holders of the token.
CAKE Tokenomics Adjustments
The primary focus of this new decision is lowering staking inflation while promoting real yield from protocol revenues. It also looks at reducing incentives given to traders and stakers by more than 68%, aiming for CAKE to become deflationary. This results in an immediate reduction of emission rates from 6.65 CAKE per block down to 3 CAKE per block. After five months, this will be reduced even further down to 0.35 CAKE per block (~2% APR). This means there will be a 94% drop in total emissions from PancakeSwap’s Syrup Pool – reducing the annual inflation rate from 21% all the way down to between 3%-5%.
The change was based on feedback from PancakeSwap’s community members after they were presented with three viable options for making their token “emission neutral”. The option chosen allowed for the aggressive reduction of CAKE which received majority support from voters.
Impact of Changes
These new changes are expected have a positive impact on PancakeSwap and its users as it encourages long-term holdership and also incentivizes users with higher returns over time through its deflationary economy model.
Overall, these changes should have a positive effect on pancake swap as it creates an environment that rewards long-term holders while reducing unnecessary emissions – creating a more sustainable platform in the process