Proposal to Reduce CAKE Token Total Supply

Over the past year, PancakeSwap has significantly revamped its tokenomics, emissions, and growth strategy. Starting from improving CAKE Tokenomics v2.5 to most recently launching the veCAKE Gauges System, CAKE is in a position to pursue further growth across all deployments.

Now that CAKE has achieved consistent deflation for several months and is focusing on accelerating our journey to ultrasound CAKE, this proposal aims to reduce the CAKE token’s total supply to a maximum cap of 450M CAKE.

With a current total supply of 388M CAKE, the Kitchen believes this new and lower cap will be sufficient to gain market share across all chains and sustain the veCAKE model.

Proposal Rationale:

There are several strong reasons to implement this adjustment:

Certainty for the community on future CAKE token supply:

When PancakeSwap launched in 2021, to ensure that there were sufficient incentives to bootstrap the ecosystem, there was significant token inflation. After almost 3 years in development, we now have more accurate estimations of incentives required to achieve our growth targets.

Accelerate the journey to ultrasound CAKE:

Total supply is an important metric when understanding the impact of token burns and future emissions. Lowering this number is a critical step to achieve ultrasound CAKE and enables us to send a clear signal of PancakeSwap’s pivot away from a hyperinflationary tokenomics model.

Ensure sufficient flexibility for growth:

450M CAKE is a reasonable new cap as it ensures sufficient supply for future growth (e.g., gaining market share on Ethereum, Ethereum L2s, and new initiatives like position managers)