PancakeSwap’s CAKE spikes over 20% after proposal to reduce token supply by 300 million

The price of CAKE

+11.94%
the native token from decentralized exchange PancakeSwap, spiked over 20% after a proposal to reduce its maximum supply by 300 million.

CAKE was trading at $2.52 at 9:20 a.m. ET, up 13.1% in the past 24 hours, according to The Block’s Price Page for CAKE.

Price activity for PancakeSwap’s CAKE token. Image: the block’s pricing page

PancakeSwap announced Thursday a proposal to reduce CAKE’s supply from 750 million to 450 million.

“By reducing our token supply by 300,000,000 CAKE, we signal PancakeSwap’s successful transition from a high-inflation emissions model to a much more efficient flywheel,” PancakeSwap wrote on X.

The proposal

“Over the past year, PancakeSwap has significantly revamped its tokenomics, issuance and growth strategy,” said the proposal for the indicated symbolic reduction. “From advancing CAKE Tokenomics v2.5 to the most recent launch of the veCAKE Gauges System, CAKE is positioned to pursue continued growth across all deployments.”

“With CAKE having achieved consistent deflation for several months and focusing on accelerating our journey towards ultrasound CAKE, this proposal aims to reduce the total supply of the CAKE token to a maximum of 450 million CAKE. With a current circulating supply of 388 million CAKE De Kitchen believes that this new and lower limit will be sufficient to increase market share across all chains and sustain the veCAKE model,” the proposal said.