Community members of decentralized exchange PancakeSwap started voting Thursday on whether to reduce the total supply of CAKE.
With the governance vote set to end tomorrow, Dec. 29, the vast majority of the community – representing more than 97% of all votes cast to date – has been in favor of decreasing the total supply of CAKE from 750 million to 450 million tokens.
“450M CAKE is a reasonable new cap to implement in order to ensure sufficient supply for future growth (e.g., gaining market share on Ethereum, Ethereum L2s, and new initiatives like position managers,” PancakeSwap’s core administration wrote in the proposal.
CAKE is the native token for PancakeSwap. Members use them to receive discounts on trading fees, and holders who stake their tokens can participate in the decentralized exchange’s governance system.
The reduction of CAKE’s total supply is “a clear signal of PancakeSwap’s pivot away from a hyperinflationary tokenomics model,” the administrators added. A hyperinflationary tokenomics model is a type of cryptocurrency system where the supply of tokens increases at an extremely rapid rate, often leading to a decline in the token’s purchasing power over time.
The price of CAKE has increased roughly 9% in the past 24 hours and nearly 52% in the past seven days to $3.75, according to data from CoinGecko at the time of publication. CAKE’s current market cap stands just above $1 billion.
Analytics from on-chain data firm DefiLlama show that PancakeSwap has generated $196.43 million in annualized fees.