PancakeSwap (running on Binance Smart Chain)CAKE) had a year out of sight, losing 23% of its value last year. The drop in price was a cause for concern for investors and ecosystem participants. However, with its recent proposal, the community aims to reduce the total supply from 750 million tokens to 450 million.
The currently circulating supply of CAKE is around 388 million, and capping it at 450 million means there are only 62 million new coins to be added in the future.
This move is also supported by the community, with the belief that it can rebound after losing huge value since reaching an all-time high of $43.96 in April 2021. PancakeSwap’s native token has been witnessing a steady decline for the last two years and is currently trading above $2.50. Therefore, restricting the total token supply may be beneficial.
This step indicates that PancakeSwap aims to move away from the hyperinflationary tokenomic model. In addition, it believes that the revised CAKE total supply of 450 million tokens is reasonable enough to provide sufficient flexibility for growth and development.
This development caused the price to rise by nearly 20% in a short time, while the transaction volume skyrocketed by 179%.