PancakeSwap DAO Votes For “Aggressive Reduction” of CAKE Token Inflation

A community vote to reduce cake (CAKE) block rewards emitted by the decentralized finance (DeFi) protocol PancakeSwap is nearing completion – with nearly 70% of votes in favor of an “aggressive reduction.” The vote ends 15:30 UTC on April 28.

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%. The so-called CAKE “emissions” on Syrup Pool, PancakeSwap’s main liquidity pool on BNB Smart Chain, would drop by 94% under the proposal.

Syrup Pools allow users to lock tokens for up to one year in order to earn CAKE rewards.

The vote, floated earlier this week and mulled since early April, will adjust CAKE emissions from 6.65 cake/block to 3 cake/block immediately, followed by reducing 0.5 cake/block monthly for 5 months until emissions reach just 0.35 cake/block each month.

PancakeSwap DAO has voted for an “aggressive reduction” of cake emissions. (PancakeSwap)

That is a 94% drop from the current emission rates. Cake tokens are used on PancakeSwap to receive discounts on trading fees, entries into lotteries, purchases of NFTs, or investing in token offerings.

Cake’s emission rates were a point of concern among several PancakeSwap community members for some time. The high inflation rate was deemed unsustainable – as it relied on a constant flow of new money to be maintained – and did not benefit long-term cake holders.

Plans were made to either reduce cake rewards aggressively or gradually, both options aiming to reduce emissions to 0.35 cake/block in varying amounts of time. Some 10% of members have voted for a gradual reduction, governance veri shows.

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A third option floated is that of doing nothing and leaving the emissions as is – a choice that has received nearly 20% of community votes.

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That’s because reducing block rewards may mean reduced yield for newer stakers – which could eventually mean lesser capital flowing to PancakeSwap and causing a fall in protocol revenues.

Edited by Parikshit Mishra.

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