- PancakeSwap seeks to reduce the inflation rate of the native token from 3 to 5% per year since it is currently above 20%.
- To achieve this, the firm will seek to transition to a CAKE staking model characterized by low staking inflation, real returns drawn from PancakeSwap protocol revenue, and product benefits that favor CAKE participants over the longer term. .
- The initial proposal will begin to be discussed today, Wednesday April 19 and Friday the 21st.
DeFi (decentralized finance) is one of the great attractions of the crypto ecosystem and its growth denotes the interest of the entire sector. To get a loan it is no longer necessary to go to the bank nor is it necessary to leave large guarantees. It is possible to earn great returns outside of traditional banking.
PancakeSwapa pioneering platform on the Binance Smart Chain blockchain, plays a key role for the most famous exchange in the world and its community is faced with the possibility of limiting the inflation of a token that has a maximum production limit of 750 million, but of which periodic burnings are carried out to control it.
“We believe the time has come to take this model to the next level and supercharge CAKE towards a deflationary model based on actual performance and CAKE burn.”their leaders wrote in their Blog official.
Cake inflation will drop from 3 to 5%
The proposal is clear and has received good responses, The objective is to reduce the inflation rate of the native token to no more than 5% per year when it is currently above 20%.
Version 2.5 of CAKE heading for a “deflationary model”, as they called it, would cut the rewards it currently gives out by more than 68%. It is worth noting that the staking blocked today delivers up to 41.34% APR, while there are farms that far exceed this number.
“Our discussion proposal aims to transform the high-inflation CAKE staking model to a low-inflation model with real return and utility”said a PancakeSwap employee Chef Brie on the exchange’s Discord server as reported by CoinDesk.
What does lower inflation mean for CAKE?
Probably good news. A rare good is more valuable than a common one, so the price could go up. At the moment it has not had a great impact, since at the time of writing this article it had barely grown by 0.73% in the last 24 hours.
CAKE is currently trading at $3.62 and ranks 76th among the most valuable cryptocurrencies on the market with a capitalization of $670 billion (13.6 million units). Its maximum peak was experienced in April 2021 when it reached $44.18; in this bear market it hit a floor of $2.51.
The initial proposal will begin to be discussed today, Wednesday April 19 and Friday April 21Based on what was collected, the final project will be defined. The final vote will take place the following week. In case it exceeds 50% approval, it will begin to be carried out.
As mentioned, PancakeSwap was born on the Binance blockchain but is currently working on Ethereum and Aptos. The data collected by Coin Market Cap reveal that both PancakeSwap v3 and PancakeSwap v2 are among the most used platforms together with Uniswap, a project created mainly on Ethereum.
The DEX reaped in the last day more than $120 million dollars in each of its versions, always on the BSC. In Ethereum, meanwhile, it does not even reach $8 million dollars.
CAKE’s value is more than 80% of its ATH and the leaders are excited to be protagonists in the next bull run. If the proposal is finally approved, it may have a good chance.
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