PancakeSwap, the leading decentralized exchange operating on the BNB Chain, is about to enter a transformative phase with the launch of CAKE Tokenomics 3.0. The initiative, scheduled for rollout on April 23, 2025, aims to establish a more sustainable and deflationary environment for the CAKE token. The upgrade promises to reshape core elements of staking, governance, and emission strategies. While the development signals growth and maturity, it also surfaces differing perspectives among stakeholders.
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CAKE Tokenomics 3.0 Approved in Just 10 Days
The path to CAKE Tokenomics 3.0 was shaped through open dialogue. On April 8, 2025, PancakeSwap began community consultations with an early discussion draft. Following days of feedback and revision, an official proposal was submitted for voting on April 15.
Just three days later, on April 18, the proposal received majority approval. The scheduled implementation date of April 23 reflects a brisk yet inclusive decision-making process that emphasizes community governance at its core.
A significant shift begins with the retirement of veCAKE and Gauges Voting. These features will be formally phased out starting from April 23 at 00:00 AM UTC. The final round of voting concludes with Epoch 37, and its decisions will determine emissions for Epoch 38, which spans April 25 to May 6. All related reward mechanisms will stop producing new earnings by 00:00 AM UTC on May 7.
Another critical element is the full unlocking of CAKE and veCAKE staking at 08:00 AM UTC on April 23. Users who had staked CAKE directly via the PancakeSwap interface will be able to redeem veCAKE at a 1:1 ratio. The window for redemption remains open for six months, closing at 08:00 AM UTC on October 23, 2025.
Yield Rewards Gone – Here’s What Replaced Them
Farming incentives are also undergoing a significant change. Farm boosting will be gradually phased out between April 24 and May 7, 2025. Once that period ends, no additional rewards will accrue from yield-boosted positions in farming and syrup pools. Similarly, revenue sharing from v3 trading pools – specifically those charging 0.01% and 0.05% fees – will be discontinued after May 7. This shift marks an end to a mechanism that once allocated 5% of collected fees to CAKE holders.
Rather than being redistributed as rewards, these trading fees will now contribute directly to CAKE’s burn process. The burn rate for the relevant pools will rise from 10% to 15%, reinforcing the deflationary model and ensuring that more CAKE is permanently removed from circulation over time.
At the same time, emission reductions will be executed in two distinct phases. Beginning April 25, the daily CAKE output will drop from 29,000 to 20,000. Half of the emissions previously assigned to the Ecosystem Growth Fund – approximately 3,250 CAKE per day— – will now be redirected into token burning. Within four weeks of this change, a second phase will further reduce emissions to 14,500 CAKE per day, establishing a permanent annual burn of around 5.3 million CAKE.
5.29M CAKE locked – Redemption portals launching soon
The legacy CAKE Pool, identified by contract 0x45c5…, played a central role during the veCAKE system’s early phase. Delegation enabled users to contribute to governance without moving their locked CAKE. Approximately 5.29 million CAKE was delegated from this pool, with 1.17 million going to StakeDAO and 4.12 million to CakePie.
As CAKE Tokenomics 3.0 takes hold, this delegated CAKE is marked as permanently locked and will be injected into locker protocols on April 21 during PancakeSwap’s Monday Burn. The Dune Burn dashboard will be updated accordingly, although the adjustment will not impact CAKE’s total circulating supply. Users who delegated via StakeDAO, Aster, or CakePie can expect the locker platforms to launch dedicated redemption portals.
For those who directly staked CAKE via PancakeSwap’s interface, the process remains straightforward. They have until October 23 to retrieve their tokens at a 1:1 rate. However, those who staked through manager protocols must follow the redemption timelines shared by those entities.
Diverging Views and Compensation Proposal
While the new framework is framed as a strategic push for sustainability, it has not been universally welcomed. Notably, Cakepie DAO – a major veCAKE holder – has raised strong objections. Through a public post, the DAO expressed its discontent:
“Sunsetting veCAKE would be devastating for Cakepie and for every project built on long-term alignment with PancakeSwap. Our entire ecosystem is structured around veCAKE, with millions of CAKE locked for four years as a clear show of commitment. Removing veCAKE would erase that commitment overnight and undermine the trust and efforts of all builders who believed in PancakeSwap’s vision.”
This tension led PancakeSwap to introduce a compensation offer. The protocol proposed a $1.5 million package in CAKE tokens to Cakepie DAO. In exchange, Cakepie would facilitate a 1:1 swap between its native token, mCAKE, and CAKE itself. At present, Cakepie is holding a vote to determine whether it will accept the deal.
Not everyone sees the update as damaging. Chef Philip, offering a perspective that supports the changes, says:
“At its core, CAKE Tokenomics 3.0 defends true value and protects CAKE holders by strengthening long-term fundamentals – such as aggressively cutting emissions to accelerate deflation and sustainably grow value.”
Closing Thoughts
CAKE Tokenomics 3.0 represents a carefully structured attempt to future-proof PancakeSwap’s ecosystem. The retirement of veCAKE and the end of familiar reward models mark the end of an era, while a strong focus on deflation, sustainability, and value redistribution signals a new direction. Although internal divisions remain, the implementation of these changes might benefit PancakeSwap in the long run.
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