![Pancakeswap and $CAKE, what is going on?](https://images.ecency.com/DQmQv3dtvikj9Lf18BKzsxYUkVSxYsfo5a3JD1VxZSEZ9gr/pancakeswap.jpg)

If you have been looking at $CAKE over the last couple of weeks you will have noticed something pretty major taking place. Something that was completely unrelated to the rest of the crypto market. But what happened, and why? Let us see if we can figure this out.

## **$CAKE price fell hard for two days straight**

Starting on April 24th and ending on April 25th, $CAKE´s price seemingly plummeted. Falling from a high of $3.35 on the 24th and ending out bottoming at a staggering $2.61 on the 25th. This is a loss in value of 22%, so over those two days, $CAKE lost over 1/5th of its value. But what happened, was there some sort of cataclysmic event, a hack a major loss of confidence in the project?

![$CAKE price](https://cdn.publish0x.com/prod/fs/cachedimages/3233838158-6309dfd9635296c8074d2c5f759c655e4bdeccad29477345c0649c048053398d.webp)

A few days before this it was announced that the PancakeswapDAO had put up a new vote trying to make $CAKE more deflationary. And I think this vote coincides with a lot of people getting back their $CAKE and have staked it for around a  year at very high APY. I assume they either sold off their gains thinking the vote would affect the price negatively. Or that they did not approve of the propositions. 

If we take a look at the price we can even see a smaller initial drop in price for $CAKE happening on the 19th. Just around the same time, the DAO vote was put forth.

![$CAKE price](https://cdn.publish0x.com/prod/fs/cachedimages/1975489852-799e00e9138e23485b3fb28450b96550fc61269a91e30c322978b44a816cead7.webp)

If we factor this into the drop in price for $CAKE we see that the real drop in price is actually closer to 30%. But what is it being proposed that could have caused this drop in price? Let us take a look at the proposals.

## **PancakeswappDAO proposal**

In short, the proposal put forth three alternatives to the $CAKE token holders. The first was reducing the $CAKE inflation fast, the second more gradually, and the third option was to do nothing. Below you can see the current amount of $CAKE being produced per block, and at the bottom, you can see the goal. The end goal for both the fast and the slower proposals is the same. The only thing separating them is the time to reach it.

![$CAKE emissions](https://cdn.publish0x.com/prod/fs/cachedimages/1882697187-6439113cc9b19f882b086d151e3284bf77b8164df8b467fbcc2dca72360bd3a2.webp)

The voting actually ended earlier today. And for the curious persons, the winner of the vote was. \*drumroll\* The fast option. It was the clear winner among the two proposals to cut $CAKE emissions. And the only real competition was the "do nothing" votes. 

<center>
![Voting result](https://cdn.publish0x.com/prod/fs/cachedimages/1305882856-98d93d1f4384755aba0d2f33fee43598b3bc37a289cf37216ddebb22da94427f.webp)
</center>

With the yes option winning, are there any potential drawbacks to enacting this? Having low inflation on the token seems like a very good thing in the long run. Right?

## **Potential drawbacks and benefits**

One of the potential drawbacks is actually the very thing we have just seen. People taking their crypto and going elsewhere. It also has the potential to happen the growth of the project, by that I mean people might be reluctant to invest in a project that does not give exuberant returns. And it could potentially kill the project. If enough people just sold their $CAKE and removed all their investments from the project, there would be very little of anything left. Is this likely, I would argue no.

Do this new targeted low yearly inflation rate of $CAKE, ~3-5%, have to be something bad? I would argue that it in fact could mean the project becomes stronger if it can continue to grow. There are plenty of examples of projects in the crypto space that offer exuberant returns, and many of them have been revealed to be scams. Looking at you Celsius and Terra. There are also several examples of "vampire attacks" in the crypto space.

A vampire attack is when someone offers the exact same thing as someone else only with higher returns. All customers swap from the first place to the second place, leaving the first places empty, or sucked dry if you will. Hence the name.

And with those in mind, I think it actually is a positive thing we are witnessing with $CAKE. Well, at least I hope it will prove to be positive for the project in the long run.

And I would like to end by disclosing that in fact, I am an owner of $CAKE. Not a large amount by any stretch. But I still felt it prudent to disclose. As it potentially could impact my judgment. Even if I hope it has not. And I did not partake in the vote. If you want to read the proposal in its integrity a link to it can also be found down below.

What is your thought on what is happening with Pancakeswap and $CAKE currently? Have I missed anything that you would argue is contributing to the drop in price? Please sound off in the comment section down below. If you would like to support me and the content I make, please consider following me, reading my other posts, or why not do both instead.

See you on the interwebs!

Picture provided by: CoinMarketCap, [https://pancakeswap.finance/](https://pancakeswap.finance/,), [https://pixabay.com/](https://pixabay.com/) 

**Resources**

1. [https://pancakeswap.finance/voting/proposal/0x707643dd2c2b941c7274f26a0362922198912e8549050ae9f2d1d9d71ada04bb](https://pancakeswap.finance/voting/proposal/0x707643dd2c2b941c7274f26a0362922198912e8549050ae9f2d1d9d71ada04bb)