PancakeSwap Proposes Implementing veCAKE Tokenomics Model

PancakeSwap Proposes Implementing veCAKE Tokenomics Model

The leading DEX on the BNB Chain ecosystem, PancakeSwap, has proposed a new tokenomics model called veCAKE. This proposal is currently under community discussion, with the voting process being shared on PancakeSwap's official X (Twitter) account.

PancakeSwap's veCAKE Proposal on Twitter

Key Features of the veCAKE Model

With the transition to the new model, users who lock CAKE and hold veCAKE tokens will have the ability to:

• Vote on the allocation of token rewards to their preferred pools.
• Create a market for votes, allowing for the buying, selling, and incentivizing of votes.

Changes in CAKE Distribution

Additionally, PancakeSwap has announced changes in the distribution of CAKE tokens. Specifically:

• 0.35 CAKE per block from Syrup Pool activities
• 0.64 CAKE per block from Farm Pools on BNB Chain, Ethereum, and Arbitrum

These allocations will be redirected to support veCAKE activities, totaling 0.99 CAKE per block. However, this reallocation will be implemented gradually to avoid significant changes in liquidity pools, which could lead to unnecessary risks.

Community Voting and Adoption

As of now, over 99% of the votes are in favor of the proposal, with the voting process expected to conclude by 05:30 PM on November 22. Given the strong support, it is highly likely that the plan will be approved.

The veTokenomics Model

The veToken model is not entirely new, with Curve Finance being a pioneer in integrating this solution. While veTokenomics incentivizes users to participate in governance and offers higher yields, it also presents challenges related to decentralization and excessive token emissions.

Current Voting Results for veCAKE Implementation on PancakeSwap

Conclusion

If approved, the veCAKE model will represent a significant shift in PancakeSwap's tokenomics, aiming to enhance user participation and optimize reward distribution. The community's strong support suggests that the changes will be implemented smoothly, potentially setting a new standard for other DeFi platforms to follow.