PancakeSwap’s CAKE token is rising after the team suggested lowering the token’s supply. According to Coingecko, CAKE saw a 20% rise on Thursday, the most since May.
The increase comes after the decentralized exchange PancakeSwap proposed lowering the maximum CAKE token supply from 750 million to 450 million.
By removing 300 million tokens from circulation, the PancakeSwap team, CAKE seeks to indicate a move away from a high-inflation emissions model and toward a more efficient flywheel, according to the team’s post on X.
“After a year of hard work and deflation, we are razor-focused on ultrasound CAKE,” the post read. According to DeFiLlama, PancakeSwap is the most popular protocol on the Binance Smart Chain, with $1.4 billion in total value locked.
PancakeSwap’s lead developer, ChefMochi, stated in the exchange’s forum that CAKE uses a buyback-and-burn business strategy. Deflation occurs when the amount of CAKE burned and purchased exceeds the amount released, and vice versa.
As of December 5th, PancakeSwap had burned 0.089% of the CAKE total supply for November, marking the third consecutive month of CAKE total supply reduction, according to PancakeSwap’s latest report.
Also Read: PancakeSwap’s Native Token CAKE Soars 92% After Unveiling Position Manager Tool
