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A proposal to make PancakeSwap (CAKE) scarce isnt preventing the token from collapsing, reading from the candlestick recorded on April 19.

CAKE is the utility token of PancakeSwap, a decentralized exchange running on the Binance Smart Chain (BSC). Like the rest of the cryptocurrency market, CAKE is under immense pressure, dropping four percent on the last trading day.

Notably, CAKE is also down 25% from early February. The token price is at March 2023 lows and looks likely to break the support line at around $3.45.

The bearish engulfing bar of April 19 is wide-ranging and with decent volumes. It is a continuation of losses of March 27 and a confirmation of sellers set in motion on February 9. On this day, the Uniswap community voted to deploy Uniswap v3 on BNB Chain, a smart contracting platform similar to Ethereum.

It also marked the first time Uniswap, a decentralized exchange, had been deployed to a high-activity platform like the BNB Chain. The contraction of CAKE prices was in response to the expected competition considering Uniswaps dominance in Ethereum and decentralized finance (DeFi), judging from the protocols total value locked (TVL).

As an illustration, DeFiLlama data on April 19 shows thatUniswaphad a TVL of $4.29 billion, more than $2 billion that of PancakeSwap. Despite initial fears, PancakeSwap remains the dominant DEX on the BNB Chain ecosystem, enabling the trading of BEP-20 tokens.

CAKEs dump continues even after a proposal from the PancakeSwap community to make CAKE more deflationary. In the newproposal, CAKE would have an annual inflation rate of 3% and 5%, prioritizing shifting to a more sustainable staking model. Here, the goal is to have low staking inflation of CAKE, wherein the real yield is from PancakeSwaps revenue. At the same time, the goal is to create a structure that favors long-term CAKE staking.

Breaking down details, staking allocation per block will drop from 6.65 CAKE per block to a target of about 0.35 1 CAKE per block. At the same time, a system favoring long-term stakers will see CAKE holders who choose to tie their tokens for longer earn a bigger share of the platforms revenue. CAKE stakers will be allocated 5% of trading fees generated from PancakeSwap v3.

Voting on this proposal started on April 19, 4 PM UTC and ends on April 21, same time. The voting period is to allow for consensus. As of writing, 63% of all voters favor the proposal to make CAKE ultrasound. For this system to be implemented, it should receive majority support from the community.

Feature Image From Canva, Chart From TradingView

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PancakeSwap Voting To Make CAKE Deflationary, But Prices Are Free-falling - NewsBTC