PancakeSwap's CAKE Token Jumps After Proposal to Reduce Supply
The PancakeSwap team wants to reduce the maximum token supply of CAKE from 750 million to 450 million.
By: Camila Russo • Loading...
DeFi![ancakes dripping in syrup with rising line charts in the background](/_next/image?url=https%3A%2F%2Fcdn.sanity.io%2Fimages%2F6oftkxoa%2Fproduction%2F4c03e80d3587c98563be1d56f17decd1c43d9f4c-1792x1024.png&w=828&q=75)
PancakeSwap's CAKE token is rallying after the team proposed to reduce the token's supply.
CAKE jumped by as much as 20% on Thursday, the highest since May, according to Coingecko. The surge follows a proposal by PancakeSwap, a decentralized exchange, to reduce the maximum token supply of CAKE to 450 million from 750 million.
![the-defiant](/_next/image?url=https%3A%2F%2Fcdn.sanity.io%2Fimages%2F6oftkxoa%2Fproduction%2Fd033887e71b13d5e1e0183b345fe3d3905d31c01-812x563.png&w=828&q=100)
By decreasing the token supply by 300 million CAKE, the PancakeSwap team aims to signal a shift away from a high-inflation emissions model towards a more efficient flywheel, the team said in a post on X.
"After a year of hard work and deflation, we are razor-focused on ultrasound CAKE," the post said.
PancakeSwap is the top protocol on BNB Chain, with $1.4 billion of total value locked, according to DeFiLlama.
ChefMochi, the lead developer behind PancakeSwap, said in the exchange's forum that CAKE operates on a buyback-and-burn model. If the amount of CAKE bought and burned exceeds the amount emitted, it becomes deflationary, and vice versa.
As of December 5th, PancakeSwap had burned 0.089% of the CAKE total supply for November, marking the third consecutive month of CAKE total supply reduction, according to PancakeSwap's latest report.
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