The PancakeSwap team has proposed the introduction of Vote-Escrowed CAKE (veCAKE) to enhance governance influence, increase liquidity in pools, and reward CAKE holders. The proposal has garnered over 98% approval.
The initiative aims to boost rewards and empower CAKE holders. VeCAKE holders would have the ability to direct CAKE emissions in farms and could delegate voting rights to external protocols for additional rewards.
This proposal is part of PancakeSwap’s Q4 roadmap, and the “voting gauges” will allow veCAKE holders to vote on the distribution of CAKE farm emissions. This means that holders, stakers, and protocols can accumulate veCAKE to influence reward distributions in different liquidity pools on the decentralized exchange.
What are the Proposed “ve” Tokens by PancakeSwap?
The Vote-Escrowed (ve) model was popularized by Curve Finance and adopted by many exchanges. It allows users to lock their tokens for a set period during which they cannot be traded. In return, they receive “ve” tokens, granting them more substantial voting rights in governance decisions and often higher protocol rewards.
The rollout of “voting gauges” will occur in phases, starting with liquidity pools on BNB Chain, Ethereum, and Arbitrum, with approximately 0.99 CAKE per block in rewards. Later stages will see expansions to other chains.
The “Kitchen” team, managing the PancakeSwap platform, proposes retaining a 40% voting share in the initial rollout to ensure a smooth transition for liquidity providers and to ensure that main pools continue to receive sufficient incentives. This percentage is expected to decrease over time as veCAKE participants become familiar with the process.
Voting on the proposal is set to conclude tomorrow. If approved, the proposal will be implemented, and veCAKE will be launched shortly after the vote concludes.
At the time of writing this article, according to the data provided by CoinMarketCap, CAKE is trading at $2.6, reflecting an increase of approximately 2% over the last 24 hours. Its market capitalization has also grown similarly, surpassing $600 million, and its trading volume has experienced a significant jump of 99.3%, currently standing at around $227.6 million.
PancakeSwap currently offers DEX trading on various chains, including BNB Chain, Ethereum, Polygon, Arbitrum, among others.