- CAKE token declined on the week as the PancakeSwap community voted for an “aggressive reduction” in staking rewards.
- The DAO proposed slashing the number of tokens stakers earn as interest for locking up their coins.
- If passed, the reworked tokenomics would drastically reduce CAKE’s current unsustainable inflation rate and stem the token’s emission rate.
- Stakers have unlocked over 400 million CAKE since the DAO floated the proposal while 70% of the community backs the move.
On the weekly chart, PancakeSwap’s native asset CAKE declined by over 20%. The dip in CAKE’s price coincides with an exodus of staked tokens and a community vote to tweak tokenomics.
The community that governs PancakeSwap, a major decentralized trading venue that runs atop Binance’s BNB Chain, is considering a proposal to reduce staking rewards by slashing CAKE block emissions.
PancakeSwap Team To Cut Emissions By Over 90%
Core developers published a proposal to this effect and voting kicked off earlier this week, although members of the protocols DAO started debating the proposal since early April. The proposal aims to cut down CAKE’s interest to around 3-5%. The current rate above 20% was deemed “unsustainable” by some community members.
To achieve this, the core team will change CAKE emissions from 6.65 CAKE per block to 3 CAKE per block if the proposal is voted for. 70% of community members already voted in favor of this “aggressive reduction”. Emissions refer to the rate new crypto coins are released or added to the total supply.
The first emission reduction will be immediate. Afterward, developers will slash token emissions by 0.5 CAKE per month. This reduction will happen every month for five months till emissions occur at a 0.35 CAKE per month rate.
If passed, the team will implement a token emission slash of over 90%. The CAKE Tokenomics v2.5 proposal would essentially take PancakeSwap’s token into a deflationary supply. Almost 20% of the community voted against the proposal.
An alternative option to gradually reduce emissions received support from 10% of the voters.