CAKE Drops 24% on the Week as PancakeSwap Community Mulls Slashing Staking Rewards

PancakeSwap’s native token has been flattened this previous week.

CAKE token has plummeted roughly 24.4% over the previous seven days, per CoinGecko, as a proposed change to the challenge’s tokenomics looms massive.

PancakeSwap is a decentralized alternate (DEX) constructed on the BNB Chain. The challenge not too long ago forked Uniswap V3’s code and launched its model on Ethereum and Aptos.

The core crew launched the proposal to cut back the token’s inflation fee to 3-5% from the present charges above 20%.

In plain English, the proposal, if handed, would decrease the quantity of tokens the challenge’s stakers can earn.

“Present inflation charges are unsustainable for CAKE over the long run, and reductions are required for the long-term well being of PancakeSwap,” reads the proposal.

The vote on the proposal started on April 26 and ends tomorrow. At the moment, the neighborhood has voted in favor of an “aggressive discount” of staking rewards, which might minimize the quantity of tokens emitted by greater than half.

Whereas the lowered inflation fee will enhance tokenomics by slowing dilution of its provide, the quick decline in staking rewards has already precipitated an exodus in stakers.

The token’s worth has dropped nearly concurrently with the quantity of CAKE unstaked.

Because the crew first proposed the tokenomics change on April 19, the staking quantity has lowered from 1.007 billion CAKE to 677.851 million CAKE on April 27.

Whereas CAKE suffered declines amid the tokenomics proposal, the remainder of the cryptocurrency market skilled vital volatility resulting from macroeconomic occasions and on-chain analytics errors.

On the time of writing, Bitcoin is buying and selling roughly at par with its worth every week in the past, whereas Ethereum is down 2.6% throughout the identical interval.