Yahoo Finance PancakeSwap's DAO Voting for 'Aggressive Reduction' of CAKE Token Inflation
Join the most important conversation in crypto and web3! Secure your seat today
A community vote to reduce CAKE block rewards emitted by the decentralized-finance protocol PancakeSwap is nearing completion, with nearly 70% of votes of the decentralized autonomous organization, or DAO, in favor of an “aggressive reduction.” The vote will end 15:30 UTC on Friday.
The version 2.5 "tokenomics" proposal would move CAKE toward a deflationary model by slashing the token rewards paid to traders and stakers by over 68%. CAKE “emissions” on Syrup Pools, PancakeSwap’s main liquidity pool on the BNB Smart Chain, would drop by 94%.
Syrup Pools allows users to lock tokens for up to one year in order to earn CAKE rewards.
The proposal was floated earlier this week and had been under consideration since early April. It would adjust CAKE emissions from 6.65 cake per block to 3 cake per block immediately. That would be followed by reducing 0.5 cake per block monthly for five months until emissions reach just 0.35 cake per block each month.
That is a 94% drop from the current emission rates. CAKE tokens are used on PancakeSwap to receive discounts on trading fees and for entering lotteries, purchasing non-fungible tokens or investing in token offerings.
Cake’s emission rates were an issue of concern among several PancakeSwap community members for some time. The high inflation rate was deemed unsustainable because it relied on a constant flow of new money. Plus, it didn't benefit long-term CAKE holders.
Plans were made to reduce cake rewards either aggressively or gradually. Both options sought to reduce emissions to 0.35 cake per block in varying amounts of time. Some 10% of members have voted for a gradual reduction, governance data shows.
A third option floated is that of doing nothing and leaving the emissions as is – a choice that has received nearly 20% of the community's votes.
Reducing block rewards may mean reduced yield for newer stakers – which could eventually mean lesser capital flowing to PancakeSwap. That, in turn, could cause the platform's revenue to drop.
