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A staggering 98% member of the PancakeSwap community voted in favour of reducing the $CAKE supply by 300 million resulting into a strong surge in the $CAKE price.
PancakeSwap, a prominent decentralized exchange, has successfully concluded a proposal to reduce the maximum supply of its native token $CAKE from 750 million to 450 million, garnering nearly 98% of votes in favor. The multi-chain decentralized exchange initiated the voting process on Thursday, presenting a proposal to decrease $CAKE’s maximum token supply.
Also, the voting period has concluded, revealing a decisive 97.88% majority in support of the reduction from 750 million to 450 million.
Anticipated updates to the maximum token supply figures for $CAKE will officially reflect on major price-tracking platforms, including CoinGecko and CoinMarketCap, by January 4.
Following the conclusion of the vote, $CAKE was trading at $3.70 as of 4:49 a.m. ET. While experiencing a marginal pullback of approximately 1% in the past 24 hours, the token has demonstrated a noteworthy gain of over 49% in the preceding week.
Why Is PancakeSwap Reducing $CAKE Supply?
PancakeSwap recently unveiled a proposal to reduce the supply of its native token, $CAKE, by 300,000,000 units. Describing this move as a signal of PancakeSwap’s successful transition from a high-inflation emissions model to a more efficient flywheel, the announcement emphasizes the shift towards the goal of achieving “ultrasound $CAKE” and signifies the token’s departure from a highly inflationary model. The PancakeSwap team said:
“After achieving consistent deflation in recent months, this latest strategic move to reduce the $CAKE token’s total supply to a maximum cap of 450 million $CAKE aligns with PancakeSwap’s vision for a robust, deflationary model.”
In the past year, PancakeSwap has undergone substantial transformations in its tokenomics, emissions, and growth strategy. The platform is also set to introduce a vote-escrowed model, enabling $CAKE holders to stake their tokens for veCAKE, a concept encompassing staking rewards and incentives. The proposal added:
“Now that $CAKE has achieved consistent deflation for several months and is focusing on accelerating our journey to ultrasound $CAKE, this proposal aims to reduce the $CAKE token’s total supply to a maximum cap of 450 million $CAKE. With a current circulating supply of 388 million $CAKE, the Kitchen believes this new and lower cap will be sufficient to gain market share across all chains and sustain the veCAKE model.”
The $CAKE Price Rally
Over the last week, the PancakeSwap ($CAKE) price has rallied by a staggering 50%. At press time, $CAKE is trading at $3.69 with a market cap of $900 billion.
For more than a year, the price of the PancakeSwap token experienced a consistent downward trend within the confines of a falling wedge pattern. The converging trendline of this pattern served as a significant point of resistance and support, keeping the downward trajectory within a defined range.
Photo: TradingView
However, propelled by bullish sentiment in the overall cryptocurrency market, the $CAKE price hit its bottom at $1.05 and embarked on a new recovery. Over the past ten weeks, the coin’s price has surged by 258%, reaching a new yearly high of $3.79.
During this rally, the coin’s price broke above the upper boundary of the wedge pattern, signaling an early indication of a trend reversal. In an optimal scenario, the $CAKE price is anticipated to rally toward the highest point of the wedge pattern, currently at $5.5, representing a potential increase of 58%.
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