PancakeSwap (CAKE) token holders have been on a roller coaster ride as stakers brace for reduced rewards.The community is debating a change in the token’s economic model.Over the past week, governance token, CAKE, has suffered a continuous downward trend, dropping by 24%.Though the proposed change appears favorable to PancakeSwap, the heated debate has impacted the token’s value.
Community Debate Over Slashed Staking Rewards PancakeSwap is a decentralized exchange (DEX) built natively on the Binance Smart Chain (BSC).
It allows users to trade cryptocurrencies, provide liquidity on trading pools, and earn rewards in the form of CAKE tokens.Though the DEX has gained popularity recently due to its low fees, fast transactions, and innovative features, the economic proposal has brought uncertainty to its investors.
According to the proposal, the developers will reduce CAKE’s inflation rate from above 20% to 3-5%.This move is aimed at improving PancakeSwap’s “long-term health.” However, at the same time, it will lower the amount of tokens stakers can earn, leading to a decline in staking rewards.Voting for the proposal began on April 26 and is scheduled to conclude tomorrow, April 28th.
The community has already given a thumbs up to the “aggressive reduction” of staking rewards, which would reduce more than half the number of tokens emitted.Notably, Staking rewards are a vital component of any cryptocurrency.They incentivize token holders to keep their tokens in a platform or wallet rather than sell them on the market.Staking rewards are similar to interest earned on savings in a bank account.PancakeSwap’s staking rewards have been a significant selling point for the project, ranging from 50% to 200% per annum, depending on the trading pool.
The proposed change has sparked a debate within the community, with some arguing that reduced staking rewards will drive investors away from the project, leading to a decline in demand.Although the proposed change aims to enhance tokenomics by reducing the dilution of CAKE’s supply, it has led to an exodus of stakers.As a result, the token’s price has dropped concurrently with the amount of CAKE unstaked, as seen in the chart below.
Meanwhile, the tokenomics change proposed by the team on April 19 has also significantly reduced staking activity.The amount of CAKE staked fell from 1.007 billion to 677.851 million CAKE as of April 27.
CAKE Plummets 24% In A Week The PancakeSwap (CAKE) token has experienced a sharp decline of over 24% in the past week following the proposed proposal to reduce the token’s inflation rate.
CAKE has dropped by 24% in the past seven days, from a high of $3.43 on April 20 to a low of $27.57 on April 27.The token’s market cap has also dropped from a high of $636 million to a low of $506 million over the same period.The sudden drop in CAKE’s price reflects the crypto community’s perception of the proposed change.
If passed, the proposed change will significantly affect the project’s stakes earnings and likely reduce the token’s demand.Featured image from iStock, Chart from TradingView Leave a Reply [Cancel reply](/defi/pancakeswap-cake-plummets-24-amidst-debate-over-reduced-staking-rewards/#respond) Leave a Reply BNB Smart Chain BNB smart chain (BSC) receives user proposal for lower transaction fees BNB smart chain (BSC) receives user proposal for lower transaction fees Oluwapelumi Adejumo · 3 hours ago · 2 min read According to the proposal, BSC’s high gas fees have led to a decline in network activity — pushing its utilization to around 15-20%.2 min read Updated: March 29, 2023 at 12:10 pm Cover art/illustration via CryptoSlate Ad A BNB Smart Chain (BSC) user has proposed lowering the network’s transaction fees to increase its competitiveness against rival blockchain networks.According to the March 28 proposal, BSC needs a “more flexible transaction fee structure, [to] ensure efficient block utilization, and attract new users.” The proposal added that the reduced fees would help “sustain the BNB economy and improve BSC’s position in the market.” BSC reduced fee proposal The blockchain industry has seen growing adoption of layer-2 (L2) networks directly competing with the BSC.While BSC charges a fixed fee of 5 gwei for transactions, L2 solutions outside BNB ecosystems like Arbitrum (ARB) charge more affordable fees.For context, Arbitrum’s median gas price as of press time was 0.1 gwei, according to Nansen data.
According to the proposal, BSC’s high gas fees have led to a decline in network activity.The proposal claims BSC’s utilization is around 15-20% and could worsen if the network does not revisit its high gas fees.Due to this, BSC validators are urged to reduce their fees to as low as 3 or 4 gwei.“This change would make BSC L1 more attractive than other ecosystems’ L2 solutions and provide a competitive advantage for potential BSC L2 solutions,” the proposal noted.It added that validators would also benefit from this as it would bring more transaction volume to the network.
This gives them the financial incentive to continue participating as validators.BSC usage remains high Meanwhile, BSC remains one of the most used blockchain networks in the industry.The Binance-backed network has over 1.5 million active users.It is also the third-largest decentralized finance network — with the total value of assets locked on it at $5.04 billion, according to DeFillama data.Besides that, BSC is one of the fastest Layer-1 networks in the market presently — theoretically processing 2,200 transactions per second (TPS).
This puts it on the same level as other L2 networks like Optimism (OP) and Arbitrum.Compared to these L2 networks, it processes more daily transactions.BSC processed 3.89 million transactions on March 28, far above Arbitrum and Optimism combined, according to ycharts data.However, this is a far cry from its May 2022 peak of 9.78 million.
DeFillama data also showed that BSC is among the top three networks per decentralized exchange transaction volume — behind only Ethereum (ETH) and Arbitrum.Recent BNB Stories The total value locked (TVL) in decentralized finance (defi) has risen above the $50 billion mark after falling below the range throughout most of March.At present, the value locked in defi is approximately $50.34 billion, up 1.97% over the past 24 hours.Defi Value Swells Close to 2% Higher to Over $50 Billion With crypto assets swelling in value and the crypto economy rising 1.2% to $1.24 trillion, the total value locked (TVL) in defi on Wednesday was $50.34 billion.The defi platform Lido Finance dominates the top defi protocols with $10.76 billion, up 10.60% in seven days and up 24.61% over the past month.
Makerdao’s TVL is the only defi protocol out of the top five that has seen a TVL reduction of 1.29%.Aave, Curve, and Uniswap have seen increases with Curve jumping ahead by 13.62%.Most of the rise in defi has stemmed from the smart contract platform market capitalization rising 3.6% over the last day to $357 billion.The top five smart contract tokens have increased in value over the last week except for polygon (MATIC), which is down 3.9% over the past seven days.In terms of TVL by blockchain, Ethereum dominates the $50.34 billion by more than 59% with a total of $29.71 billion.Ethereum is followed by Tron ($5.35B), BSC ($5.1B), Arbitrum ($2B), and Polygon ($1.07B).As far as liquid staking, the top protocol on Ethereum is Lido, on Tron it’s Neopin Staking, on BSC it’s Ankr, on Arbitrum the top liquid staking app is Tenderize, and the top staking protocol on Polygon is Thunderpokt.
For Ethereum, there’s 7,843,929 ETH worth $14.29 billion locked into liquid staking protocols today, with Lido dominating the pack.Behind Lido is Coinbase ($2.15B), Rocketpool ($805.53M), Frax ($224.22M), Stakewise ($158.34M), and Stakehound ($118.85M).The top five bridges, as far as TVL is concerned, include WBTC, Justcryptos, Multichain, Poly Network, and Portal.At 3:30 p.m.
(ET) on March 22, 2023, after the recent Fed rate hike and bitcoin (BTC) dropping 3.4%, the TVL in defi has managed to remain just above the $50 billion range at $50.08 billion.Tags in this story Ankr, Arbitrum, Blockchain, Bridges, BSC, Coinbase, Cryptocurrency, decentralized finance, DeFi, Digital Assets, Dominance, Ethereum, FRAX, Justcryptos, Lido, Liquid Staking, Locked, locked-in, locked-up, locked-up value, Market Capitalization, multichain, Neopin Staking, pack, Poly Network, Polygon, portal, Protocols, Rise, Rocketpool, Smart Contract, Stakehound, Stakewise, Tenderize, Thunderpokt, tron, TVL, Value, WBTC What do you think is driving the rise in defi and its TVL? Share your thoughts about this subject in the comments section below.Jamie Redman Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida.Redman has been an active member of the cryptocurrency community since 2011.He has a passion for Bitcoin, open-source code, and decentralized applications.
Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.Image Credits: Shutterstock, Pixabay, Wiki Commons, defillama.com, Disclaimer: This article is for informational purposes only.It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies.Bitcoin.com does not provide investment, tax, legal, or accounting advice.Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.- USDC almost falls victim to the same FUD (fear, uncertainty, and doubt) that recently affected BUSD.- We saw an initial surge in USDC volume on the Binance smart chain from around 12 February.
Stablecoins found themselves in the crosshairs of the latest regulatory FUD.BUSD was the most affected stablecoin in that regard and others have managed to stay unaffected.From the looks of things, USDC just came close to being the next victim and the worst may not be over.The recent regulatory pressure forced many crypto companies to re-evaluate their strategies in the U.S.and among them is Binance, rumored to be terminating its relationships with United States-based companies including Circle, the company that issues USDC.
While the rumors have been dispelled, one can easily imagine how such an outcome would have locked out USDC from accessing robust volumes from the U.S.market.CZ responded that this is false news, blockchain has no borders (difficult to tell what is a US-based token).
https://t.co/c3N4X9LBCd — Wu Blockchain (@WuBlockchain) February 17, 2023 But has the danger really passed? From a regulatory point of view, Circle, the company behind USDC is regulated and audited in the United States.This means there is a lower risk of USDC finding itself being sidelined due to regulatory pressure.Assessing USDC volume under the latest conditions It might be interesting to see how the current conditions in the market have so far influenced the USDC demand and volume.We did see an initial surge in USDC volume on the Binance smart chain from around 12 February before peaking on 16 February.
One of the potential reasons for this is the surge in demand for the overall crypto market, hence boosting the demand for stablecoins as trading volumes surged.However, the USDC volumes on the BSC dropped substantially on Friday and Saturday (17 and 18 February).The main reason for this is likely the Binance FUD which affected BUSD for the most part before trickling down to USDC.Similarities are observed with USDC volumes on the Ethereum network whose volume also peaked on 16 February before tanking in the last two days.This confirms that there is no isolated scenario where traders are abandoning USDC in favor of other stablecoins despite FUD attempts.The above outcome reveals that the Binance FUD did not have an impact on USDC volumes or demand.Instead, the volumes were largely driven by prevailing market conditions.
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