PancakeSwap Initiates Important Vote to Reduce CAKE Emission, Token Gains 6%

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The devel­op­ers of the largest decen­tral­ized exchange built on the BNB Bea­con Chain (for­mer­ly BSC) net­work ini­ti­at­ed an impor­tant vote in accor­dance with which it is pro­posed to reduce the num­ber of native CAKE tokens being sent to farm pools direct­ly on PancakeSwap.

The main pur­pose of the vote is to lim­it issuance and thus reduce CAKE token infla­tion. At the same time, it will neg­a­tive­ly affect the annu­al inter­est rate of farms and stak­ing pools tied to CAKE. The full vot­ing descrip­tion is avail­able on the Pan­cakeSwap web­site. The vote will last for two days and will be com­plet­ed on the morn­ing of June 25.

Not many CAKEs

Infla­tion reg­u­la­tion is extreme­ly impor­tant for cryp­tocur­ren­cies. In the case of the same CAKE, the token had a max­i­mum cir­cu­la­tion lim­it, which the devel­op­ers of Pan­cakeSwap explained by the need to encour­age users to pro­vide liq­uid­i­ty, which is quite rea­son­able, because the avail­abil­i­ty of liq­uid­i­ty is key to the per­for­mance of any exchange. As a result, hold­ers were forced to reg­u­lar­ly pour their tokens into pools on Pan­cakeSwap to avoid los­ing a third of the val­ue of their CAKE every year.

In order to man­age this prob­lem on May 12, a vote to lim­it the CAKE max­i­mum sup­ply to 750 mil­lion tokens was ini­ti­at­ed and end­ed with a deci­sion in favor of. As a result, it brought the total num­ber of tokens in cir­cu­la­tion, cal­cu­lat­ed exclud­ing burned tokens, to 307.4 mil­lion CAKE, accord­ing to Coin­Mar­ket­Cap. The deci­sion had a very pos­i­tive effect on CAKE quo­ta­tions; back then, the token increased by almost 40% in two days.

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Despite such pos­i­tive devel­op­ment, cryp­to mar­ket sen­ti­ment in recent months turned out to be extreme­ly bear­ish, and the token’s price sub­se­quent­ly rolled down by 30%. Nev­er­the­less, Pan­cakeSwap builders chose not to stop and make all nec­es­sary deci­sions now, when the token price is dan­gling at the bot­tom. After the recent vote was announced, the price of CAKE rose by 7.5% and, after a slight cor­rec­tion, it stopped at $3.2 per token.

Source: Trad­ingView

Pan­cakeSwap is cur­rent­ly cap­i­tal­ized at $484 mil­lion, com­pared to $5.3 bil­lion to $6.5 bil­lion at the time of the unlim­it­ed issue. With such dif­fer­ences in val­u­a­tion, it may be sug­gest­ed that if the project man­ages to sur­vive at this stage of cryp­to mar­ket development—which is hard to doubt because the project backer is Binance itself—CAKE has a good chance to return among the top projects in terms of capitalization.



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