PancakeSwap’s Big Shift: What Tokenomics 3.0 Means for CAKE Holders

PancakeSwap has just announced a major update in its latest blog post published on April 21, 2025. Starting April 23, the decentralized exchange (DEX) is rolling out Tokenomics 3.0, marking a bold move toward sustainability and long-term growth. If you’re a CAKE holder or DeFi enthusiast, here’s everything you need to know about the changes coming your way.

Staking and veCAKE Are Coming to an End

One of the biggest changes in Tokenomics 3.0 is the discontinuation of staking and governance via veCAKE. From April 23 onwards, all locked CAKE and veCAKE positions will be unlocked, and users will have six months to redeem their tokens at a 1:1 ratio.

This marks the end of a chapter for many in the PancakeSwap ecosystem, especially those involved in governance. Decentralized governance through veCAKE has played a central role in shaping community decisions. Its removal has raised concerns, especially among long-term participants.

Introducing a Buy-and-Burn Revenue Model

The new update also brings a significant change in PancakeSwap’s revenue model. The team is moving to a buy-and-burn system. Instead of ongoing token emissions, PancakeSwap will now use platform revenue to buy back and burn CAKE tokens. This move is aimed at controlling inflation and rewarding long-term holders.

To support this, a hard cap of 450 million CAKE has been set. There will be no new emissions from yield farms, making CAKE scarcer and potentially more valuable over time.

Emission Reductions in Two Stages

Token emissions will be reduced in two steps:

• First, daily emissions drop from 29,000 CAKE to 20,000 CAKE
• Then, they will be lowered again to 14,500 CAKE per day

Thanks to this reduction, an estimated 5.3 million CAKE tokens will be burned each year, permanently removing them from circulation. The idea is simple: fewer tokens entering the market means reduced inflation and a stronger price foundation for CAKE.

Pushback from Cakepie DAO and Compensation Talks

Not everyone is happy with these changes. Cakepie DAO, a protocol built on the veCAKE model and one of the largest CAKE holders, has publicly criticized the proposal. They pointed to irregularities in the voting process and opposed the complete removal of governance.

Instead, Cakepie DAO suggested alternatives, such as:

• Rewarding high-performing pools
• Penalizing early exits

In response to the tension, PancakeSwap has proposed a compensation package. Up to $1.5 million worth of CAKE may be given to Cakepie users if the DAO agrees to a 1:1 redemption deal for mCAKE holders. Talks are ongoing, and it’s unclear if a final agreement will be reached.

PanCake Tokenomics 3.0 Upgrade Market Performance

Despite the controversy, the CAKE price is bouncing back. As of now, it’s trading at $2.01, up 0.7% in the last 24 hours. The daily trading volume has shot up 36% to $78.6 million. Even more impressive, PancakeSwap’s 24-hour DEX volume reached $1.03 billion, beating Uniswap’s $896 million, according to DeFiLlama. Weekly trading volume is also up 5%, while Uniswap’s dropped by 39%.

On the technical side, CAKE is recovering from a low of $1.60, now moving toward the Bollinger Band midline. The RSI (Relative Strength Index) has risen to 53.95, crossing into bullish territory. A breakout above $2.05 could push CAKE towards its next major resistance at $2.50.

With PancakeSwap tokenomics 3.0, it’s making bold moves to ensure the long-term health of its ecosystem. While the removal of veCAKE and governance features has sparked debate, the shift to a buy-and-burn model, along with a hard token cap, shows strong intent to support the token’s value. Whether you’re a trader, holder, or DeFi enthusiast, it’s clear that CAKE is entering a new era—one that’s leaner, more focused, and possibly more rewarding.

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