PancakeSwap (CAKE) Drops 24% Following Proposal to Cut Trading Rewards

It appears that the proposed changes to PancakeSwap’s tokenomics have not been well received, resulting in a significant 24% drop in CAKE’s value over the past week.

PancakeSwap (CAKE) Falls 24% After Proposal to Slash Trading Rewards

Update:

According to the latest results, PancakeSwap’s v2.5 proposal has been approved. Despite initial resistance to the plan to reduce inflation, the final outcome showed an unexpected shift.

"The Tokenomics v2.5 proposal has been approved and will reduce Syrup Pool emissions from 6.65 CAKE/block to 3 CAKE/block, with a target of decreasing to 0.35 CAKE/block within the next six months."

Original Article:

As reported by Coin68, last week, the leading DEX on the BNB Chain proposed adjustments to CAKE’s supply in an effort to lower inflation from 20% to just 3-5%.

This proposal includes a drastic 68% cut in token rewards for traders and stakers. This move is believed to be the reason behind the gradual exodus of users from the DEX, with CAKE’s value plummeting more than 20% to its current price of $2.60.

4H Chart of CAKE/USDT on Binance at 12:20 PM on 28/04/2023

The voting results indicate a tug-of-war between supporters at 41.63% and opponents at 56.42%, with the remaining votes favoring middle-ground inflation rates. However, as stated in the proposal, PancakeSwap will only proceed with the plan if more than 50% of the votes are in favor.

Result of PancakeSwap’s Proposal to Reduce Inflation to 3-5%:
Source: PancakeSwap

PancakeSwap is a leading DEX on the BNB Chain with over 1.5 million users. The exchange recently launched its V3 version, featuring several new and unique functionalities. In May 2022, PancakeSwap proposed to cap CAKE’s supply at 750 million, moving away from the previous model of unlimited issuance.

Currently, approximately 193 million CAKE tokens are in circulation. If the new proposal is implemented, CAKE’s supply is expected to decrease significantly in the future.