Project leads at the decentralized crypto exchange PancakeSwap on Tuesday proposed lowering the inflation rate target for its native CAKE token to 3-5%, a drastic cut from its current rate above 20%.
Inflation in this context refers to growth in the supply of a token; lower inflation could lead to higher token prices, based on the rules of supply and demand.
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.
“Our discussion proposal aims to transform from the high-inflation CAKE staking model to a low-inflation model with real yield and utility,” 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.
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The proposal is open to community feedback for the next week and will then move to a “decision proposal” for final vote, according to a blog post.
This is a developing story.