Decentralized multi-chain exchange PancakeSwap has proposed introducing CAKE (veCAKE) with deposited voting and voting meters in the coming days, with over 98% of votes currently in favor of the launch.
The move is “designed to empower CAKE holders with greater influence over governance, increase liquidity in our pools, and boost rewards for CAKE stakeholders,” according to the proposal.
As part of PancakeSwap’s Q4 roadmap, voting indicators allow veCAKE holders to vote on the distribution of CAKE agricultural emissions. This means that CAKE holders, participants, and protocols can start accumulating veCAKE and leverage their holdings to influence reward distribution across different liquidity pools on the decentralized exchange.
Specifically, holders could decide how CAKE emissions are allocated within each group, with their voting power depending on their veCAKE balance. Holders could also delegate their voting rights to external protocols and potentially earn additional rewards.
The deposited voting (ve) model was pioneered by Curve Finance and later adopted by many DEXs. It allows users to lock their tokens for a set period during which they cannot be traded. In exchange, they receive “ve” tokens, giving them more substantial voting rights in governance decisions and often higher protocol rewards. Its goal is to promote long-term engagement and align user interests with the success of a protocol, moving away from short-term speculation and toward sustained participation and decision-making.
Phased launch and initial allocations
According to the proposal, the launch of the voting indicators will occur in phases, initially covering liquidity pools on BNB Chain, Ethereum and Arbitrum, with approximately 0.99 CAKE per block in rewards. In later stages, expansions to other chains will be seen.
The “Kitchen” team that runs the PancakeSwap platform proposes retaining a 40% voting share at the initial launch, something it says is necessary to “ensure a smooth transition for liquidity providers from Kitchen-run farms to farms run by Kitchen.” farms managed by veCAKE”. , without significantly affecting their APRs” and that “the main liquidity pools continue to receive sufficient incentives, so that liquidity depth and fee generation are not significantly affected.”
Kitchen’s voting strategy would focus on maintaining competitive returns for major liquidity pools, ensuring existing agreements with partners are met, and providing some allocation to smaller farms in a gradual shift to a new veCAKE-caliber voting system. , said.
“If the indicator voting results do not significantly affect any core liquidity pool or trading volumes, Kitchen will either abstain from voting at that particular voting time or vote in alignment with existing votes,” the team added. by Kitchen. “Over time, Kitchen aims to reduce the portion of CAKE emissions managed directly by Kitchen as all veCAKE participants become familiar with the process.”
Next steps
Voting on the proposal will end tomorrow at 5:30 a.m. ET. If approved, the proposal will be enacted and veCAKE will be launched shortly after voting concludes.
PancakeSwap currently offers DEX trading on BNB Chain, Ethereum, Polygon, zkSync Era, Arbitrum, Linea, Base, Aptos, and opBNB, according to its website.
This latest proposal follows PancakeSwap’s decision to share trading fee revenue with CAKE token stakers in July. PancakeSwap also launched its own gaming marketplace last week.
