In a recent development, PancakeSwap announced an offer to reduce the total supply of CAKE to 450 million. The proposal aims to reduce CAKE’s current total supply of 750 million by over 300 million. Following the platform’s announcement, the altcoin price made a vertical rise.
PancakeSwap announces plan to reduce token supply, altcoin skyrockets!
cryptokoin.comAs you follow from , although the market started the week badly, it is struggling to finish well. In the midst of this struggle, decentralized exchange (DEX) platform PancakeSwap has made a new move. In a statement, the altcoin project opened discussions on a proposed plan to reduce the total supply of CAKE. In line with this proposal, PancakeSwap aims to reduce the total supply of CAKE by over 300 million.
Indeed, the exchange is seeking input from community members regarding its goal of reducing the total supply of the CAKE token to its maximum limit of 450 million. The offering follows months of what the platform calls “consistent deflation” through several token burns. There are currently over 388 million CAKEs in circulation. This decline was aided by consistent token burns. In total, CAKE’s current total supply is 750 million.
The bid has since triggered a vertical rise in the altcoin price. During the day, CAKE’s value saw a significant increase of 23%. Most of the rise came after the DEX’s announcement. As a result, the token erased the losses it had previously recorded on the weekly and monthly charts. However, due to the impact of profit taking, the altcoin later lost some ground. CAKE was trading at $2.53 at the time of writing, up 13.3% on a daily basis, according to CoinMarketCap data.
What does PancakeSwap aim for with this offer?
PancakeSwap stated that the proposal is a commitment to its plan to transform CAKE into a deflationary model called “Ultrasound Cake.” As for why this is important, PancakeSwap highlighted several rationales behind the offer. First, the platform said, a lower aggregate supply provides precise estimates of the incentives needed to meet growth targets. Additionally, PancakeSwap emphasized that the proposal is an important step in moving away from a hyperinflationary tokenomics approach.
Additionally, DEX stated that the token discount will help provide sufficient flexibility for growth. Along the same lines, the altcoin project believes that the new, lower cap will be enough to gain market share across all blockchains and sustain the veCAKE model. The offering follows a more aggressive burn the platform has undertaken recently. Meanwhile, considering the increase in CAKE’s value, it seems that the announcement made by the platform was received positively by investors.
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