PancakeSwap, a decentralized exchange (DEX), has proposed lowering its token inflation rate to between 3% and 5% per year, which is a significant decrease from current rates of over 20%. The DEX wants to transition its CAKE token into a staking model that emphasizes low staking inflation, real yield from PancakeSwap’s protocol revenues, and product benefits that favor longer-term CAKE stakers. The proposal includes an opportunity for tokenholders to vote on appropriate changes and a feedback form to discuss them. PancakeSwap currently operates a high-token-emission model to incentivize high yields for protocol features, such as liquidity pools and farm offerings, and to remove tokens from circulation via high staking yields.
The DEX aims to move towards a deflationary model based on real yield and CAKE burn. Developers have stated that the net emission rate of CAKE was 40 per block when it was introduced in September 2020. By May 2022, it had been lowered to 14.25 per block, and presently, it stands at 9.2 CAKE per block. The developers’ long-term goal is to introduce “ultrasound CAKE,” which will have a net emission rate of less than 2 CAKE per block. PancakeSwap is one of the most popular DEXs on the BNB Chain, with a total value locked of $2.35 billion and around 381.6 million tokens currently in circulation or locked in staking.
