CAKE Tokenomics 3.0: A New Plan to Grow the Community

PancakeSwap, one of the most recognized decentralized exchanges in the DeFi space, has announced a major overhaul to its token governance model. On April 23, 2025, the platform will officially implement CAKE Tokenomics 3.0—retiring both veCAKE and Gauges Voting, two previously critical components in its staking and governance ecosystem.

This transition is part of a broader shift toward sustainable and deflationary token economics, with an emphasis on simplifying governance and realigning incentives for long-term growth.

Read More: How to Buy PancakeSwap (CAKE)

Key Takeaways

• PancakeSwap will retire veCAKE and Gauges Voting starting April 23, 2025.
  
   
• All staked CAKE tokens must be redeemed by October 23, 2025 at a 1:1 ratio.
  
   
• The new model aims for sustainable growth and a deflationary CAKE supply.

What Is Changing in CAKE Tokenomics 3.0?

With this latest update, PancakeSwap is stepping away from the vote-escrow system (veCAKE) and Gauges Voting—both of which shaped how CAKE staking and liquidity distribution worked. These systems allowed token holders to vote on where liquidity rewards were allocated.

Starting April 23, users will no longer earn veCAKE, and Gauges Voting will be disabled. Instead, CAKE staking will be restructured under a simplified model that aims to reduce inflation and stabilize long-term token value.

Users who previously staked CAKE via veCAKE will have until October 23, 2025, to convert their holdings back to CAKE on a 1:1 basis.

Why PancakeSwap Is Making This Move

PancakeSwap's decision follows broader DeFi trends, with other protocols like Curve also reevaluating the effectiveness of vote-escrow tokenomics. While such systems offer deep governance participation, they can also create complex stakeholder dynamics and sometimes misalign short-term incentives.

The new CAKE Tokenomics 3.0 is built on the principle of deflationary supply, enhanced usability, and long-term value creation. PancakeSwap’s team has signaled that the future of CAKE lies in a leaner, more focused model that prioritizes growth without excessive token emissions.

What Does This Mean for CAKE Holders?

This update could affect both active and passive holders of CAKE:

• Stakers must act: If you’ve staked CAKE through veCAKE, you’ll need to redeem your tokens by October 23, 2025.
  
   
• Liquidity may shift: With Gauges Voting retired, liquidity providers may rebalance their capital across DeFi protocols.
  
   
• Price volatility possible: Transitions like this often lead to short-term market fluctuations, especially as large stakeholders adjust their positions.

As of April 21, CAKE is priced at $2.03 with a market cap of over $590 million and a 24-hour trading volume of $69.85 million—up 32.66% amid speculation around the update.

FAQs

What is veCAKE and why is it being retired?

veCAKE was a vote-escrowed version of CAKE that enabled governance participation and directed liquidity rewards. PancakeSwap is retiring it to simplify tokenomics and move toward a deflationary model.

What happens if I don’t redeem my staked CAKE by October 23, 2025?

You may lose access to your veCAKE if not redeemed within the specified window. Be sure to convert it back to CAKE via the platform’s redemption interface.

Will CAKE token become deflationary after Tokenomics 3.0?

Yes, the update introduces mechanisms aimed at reducing token emissions over time and encouraging long-term holding.