Controlling DEX supply
Last updated
Last updated
There's currently no hard cap on the supply of DEX token, making it an inflationary token.
Community members often point to this as a cause for concern, and while the chefs certainly understand the wish for a hard cap, there's a big reason we don't expect to set one in the near future:
DEX's primary function is to incentivize providing liquidity to the exchange. Without block rewards, there would be much less incentive to provide liquidity (LP fees etc. would remain).
So what are the other ways DEX's supply is limited, to counter inflation?
The chefs aim to making deflation higher than emission by building deflationary mechanisms into Pancakeswap's products**.** The goal is for more DEX to leave circulation than the amount of DEX that's produced.
By reducing the amount of DEX made per block, we slow inflation. This has already been done once: The first reduction in block emissions effectively reduced the number of DEX produced from 40 DEX per block to 25. But we don't want to do this too frequently, too early, for the same reason we don't want a hard cap: we still need to incentivize people to provide liquidity.
Regular token burns (view burn address) are built into many of Dex Asian's products (like a 10% burn of DEX spent on lottery tickets), with more on the way. Check the ****DEX Tokenomics page ****for details on present and upcoming deflationary mechanisms.
