Project leaders at decentralized cryptocurrency exchange PancakeSwap have proposed lowering the inflation rate target for its native CAKE token to 3%-5%, a sharp cut from The current rate was above 20% on Tuesday.
Inflation in this context refers to growth in token supply; Lower inflation can lead to higher token prices, based on the rules of supply and demand.
The “version 2.5” token proposal would move CAKE to a “deflationary model” by cutting token rewards paid to traders and stakers by more than 68%. So-called CAKE “emissions” on Syrup Pool, the main liquidity pool of PancakeSwap on BNB Smart Chain, will be reduced by 94% under the proposal.
“Our discussion proposal is aimed at transitioning from a high-inflation CAKE staking model to a low-inflation model with real yield and utility,” said 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.
According to a blog post, the proposal is open for community feedback over the next week and will then move to a “decision proposal” for a final vote.
This is an evolving story.
