PancakeSwap Unveils Tokenomics 3.0 Aiming 4% Annual Deflation
1min read PancakeSwap has unveiled its Tokenomics 3.0 proposal, which aims to achieve a 4% annual deflation rate and reduce the CAKE supply by 20% by 2030. This ambitious plan involves significant changes to the platform's tokenomics model, including the retirement of veCAKE, staking, and revenue sharing mechanisms. The goal is to unlock all CAKE for holders and redirect emissions to high-volume, real-use pools, thereby improving liquidity efficiency.
The current gauged voting system, which incentivizes long-term CAKE locking through bribe-based voting, will be phased out. This system has been criticized for its complexity and poor alignment with real market needs. By transitioning to direct emissions management, PancakeSwap aims to enable real-time scaling of emissions based on volume and pool performance, potentially increasing liquidity efficiency by 30–40%.
Under the new proposal, all staked CAKE and veCAKE will be unlocked without penalty, regardless of the original lock-up period. Users will have the option to redeem or unstake their CAKE for up to six months through the platform, promoting a more decentralized and community-driven model. This shift underscores PancakeSwap's commitment to community ownership, as the platform has never received VC funding or team allocations.
Additionally, the phasing out of revenue sharing will divert CAKE fees to CAKE burns, increasing the burn rate on specific pools from 10% to 15% and further enhancing deflation. The proposal also includes a significant reduction in CAKE emissions, from approximately 40,000 to 22,250 CAKE per day, with burns to clear liquidity. This reduction is phased in over three stages, ultimately bringing total annual emissions down from 14.6 million to 8.1 million CAKE.
The new utility model for CAKE will also simplify user participation. Users will no longer need to stake CAKE to participate in governance, Initial farm Offerings (IFOs), or Token Generation Events (TGEs). Instead, they can directly subscribe to IFOs using a non-custodial wallet, participate in TGEs through the Binance Wallet, and engage in flexible governance voting by staking tokens only for the duration of the vote. These changes aim to reduce barriers to on-chain participation, making the DeFi experience more accessible and permissionless.
PancakeSwap's commitment to transparency is evident in its proposal. All data related to CAKE burns, emissions, and volume are publicly available on Dune Analytics. The platform encourages community feedback on the proposal and plans to proceed with a vote, with immediate rollout if approved. This move towards a more sustainable, transparent, and community-led future aligns with PancakeSwap's long-standing values and goals.
