PancakeSwap Leaders Propose Cutting CAKE Token Inflation Target to 3%-5%

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Project leads at the decentralized crypto exchange PancakeSwap on Tuesday proposed lowering the inflation rate target for its native CAKE token to 3%-5%, a drastic cut from its current rate above 20%.

Inflation in this context refers to growth in the supply of a token; lower inflation could lead to higher token prices, based on the rules of supply and demand.

The “version 2.5” tokenomics proposal would move CAKE toward a “deflationary model” by slashing the token rewards paid to traders and stakers by over 68%. The so-called CAKE “emissions” on Syrup Pool, PancakeSwap’s main liquidity pool on BNB Smart Chain, would drop by 94% under the proposal.

“Our discussion proposal aims to transform from the high-inflation CAKE staking model to a low-inflation model with real yield and utility,” a PancakeSwap employee with the screen name Chef Brie said on the exchange’s Discord server.

Chef Brie referred CoinDesk to another PancakeSwap employee who did not immediately respond.

The proposal is open to community feedback for the next week and will then move to a “decision proposal” for final vote, according to a blog post.

This is a developing story.