Cakepie DAO Slams PancakeSwap’s Tokenomics 3.0 Proposal, Warns of veCAKE Fallout
Tensions are rising in the PancakeSwap ecosystem after Cakepie DAO, the largest veCAKE holder and longtime contributor to PancakeSwap’s growth, voiced strong opposition to the DEX’s newly unveiled Tokenomics Proposal 3.0.
The proposal, which includes plans to retire veCAKE, staking, gauges voting, and revenue sharing, has raised questions, particularly among protocols that have built entire ecosystems around these mechanics.
In a fiery post on X, Cakepie DAO expressed deep frustration over the proposed retirement of veCAKE, a governance mechanism introduced to reward long-term commitment and align incentives across the ecosystem.
What particularly rattled Cakepie was the manner in which the proposal was announced.
Despite locking millions of CAKE tokens for four years in good faith and consistently contributing to liquidity growth, Cakepie claims it was blindsided, learning of the changes alongside the general public.
“Our entire ecosystem is structured around veCAKE… Removing veCAKE would erase that commitment overnight.”
Cakepie, which has locked in 13 million CAKE, emphasized that this abrupt change undermines not only its efforts but also the trust of the broader BNB Chain builder community.
Tokenomics 3.0: A Vision for Deflation or a Retreat from Decentralization?
PancakeSwap’s rationale for its Tokenomics 3.0 proposal centers around a vision of deflationary growth, revenue efficiency, and protocol simplicity.
According to the team, the new model targets an ambitious 4% annual deflation rate and aims to cut daily CAKE emissions from 40,000 to 22,500.
This marks a continuation of the exchange’s deflationary trend, following a 2.7% reduction in CAKE supply last year.
In their forum post, PancakeSwap developers argued that veCAKE has failed to live up to expectations.
They point to an overly complex governance system, inefficient capital allocation through bribed votes, and the misalignment between emissions and revenue generation.
PancakeSwap also proposes unlocking all staked CAKE without penalties and redirecting all fees that were previously shared with stakers toward burning CAKE instead.
They claim the goal is to simplify the user experience, reduce costs, and build a protocol that delivers real yield through increased trading volume and reduced token inflation.
However, critics argue this comes at the cost of decentralization. veCAKE was designed to reward those who locked CAKE for long durations, granting them more influence in governance and directing emissions through gauges voting.
Critics say that by removing veCAKE, PancakeSwap would shift influence away from long-term believers toward whales and short-term holders.
Claims of Manipulation and a Call for Unity
Adding fuel to the fire, Cakepie raised serious concerns about the governance process leading up to the proposal.
The DAO claims that roughly 25 million CAKE tokens were locked across multiple wallets shortly before the Tokenomics 3.0 announcement, potentially orchestrating a governance attack.
If true, this would allow participants to vote for the proposal and immediately unlock their tokens if the changes pass, undermining the spirit of fair participation.
The DAO warned that a compromised governance process undermines trust and must not be overlooked.
A similar DAO governance problem, although related to voting, caused a problem within the Aritrum ecosystem as some participants bought votes for a new committee election.
For this PancakeSwap situation, instead of scrapping veCAKE entirely, Cakepie offers a number of constructive alternatives.
Among them are direct rewards to pools that generate real value, allow veCAKE holders who vote to receive a portion of the trading fees, and let users exit early from veCAKE lockups in exchange for a penalty, preserving the incentive to commit while increasing flexibility.
These options, Cakepie says, would address efficiency concerns while preserving the integrity of long-term tokenomics and governance.
For now, the coming days of the vote will determine the way forward from here.
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