PancakeSwap Implements Tokenomics 3.0 Upgrade Despite Community Displeasure
PancakeSwap begins Tokenomics 3.0 on April 23, 2025, transitioning to buy-and-burn, capping CAKE tokens, but faces opposition over governance changes.
PancakeSwap, a leading decentralized exchange, has started implementing its highly anticipated Tokenomics 3.0 upgrade for the CAKE token. The PancakeSwap team has confirmed that pivotal changes are scheduled to take effect on April 23, 2025.
A significant aspect of this upgrade involves discontinuing staking and governance through veCAKE. Users will be granted a six-month window to redeem their tokens at a 1:1 ratio after all locked CAKE and veCAKE positions are unlocked.
PancakeSwap Kickstarts Its 3.0 Upgrade Proposal
Tokenomics 3.0 marks a strategic shift for PancakeSwap, transitioning to a buy-and-burn revenue-sharing model while establishing a hard cap of 450 million CAKE tokens. Furthermore, the upgrade eliminates emissions from yield farms.
Notably, these modifications strategically curb token inflation, promote sustainable growth, and incentivize long-term user loyalty.
The transition will unfold in a phased approach. Initially, daily emissions will be reduced from 29,000 CAKE to 20,000 CAKE, and subsequently to 14,500 CAKE. Projections estimate that this reduction will result in the permanent burning of approximately 5.3 million CAKE tokens annually.
However, the proposal to overhaul PancakeSwap’s tokenomics has encountered opposition, notably from Cakepie DAO, a protocol based on the veCAKE model and recognized as one of the largest holders of CAKE.
Cakepie DAO Oppose Proposal
Cakepie DAO has alleged irregularities in the vote that sanctioned the changes and has voiced concerns over the removal of decentralized governance features. Removing veCAKE may significantly impact Cakepie and many projects that have been using PancakeSwap for a long time.
Cakepie DAO said their system relies on veCAKE. They have locked up a lot of CAKE for a long time to show their dedication. Getting rid of veCAKE would suddenly break this promise. This would hurt the trust and hard work of those who believed in PancakeSwap’s plan.
Cakepie DAO also stated that this choice establishes a poor precedent for community decision-making. It demonstrates that abruptly altering crucial rules can negatively impact even long-standing commitments and investments. The DAO asserted that decision-makers implemented these changes without prior discussion or community consultation, unfairly harming loyal supporters.
Instead of getting rid of the whole system, Cakepie DAO suggested changing it. They said they could reward good pools and punish early exits. PancakeSwap offered up to $1.5 million in CAKE to compensate Cakepie users. This depends on Cakepie DAO agreeing to a deal where mCAKE holders can exchange their tokens on a one-for-one basis.
